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How Much Crime Reduction Does the Marginal Prisoner Buy?

Listed author(s):
  • Rucker Johnson
  • Steven Raphael
Registered author(s):

    We estimate the effect of changes in incarceration rates on changes in crime rates using state-level panel data. We develop an instrument for future changes in incarceration rates based on the theoretically predicted dynamic adjustment path of the aggregate incarceration rate in response to a shock to prison entrance or exit transition probabilities. Given that incarceration rates adjust to permanent changes in behavior with a dynamic lag, one can identify variation in incarceration rates that is not contaminated by contemporary changes in criminal behavior. For the period 1978-2004, we find crime-prison elasticities that are considerably larger than those implied by ordinary least squares estimates. We also present results for two subperiods: 1978-90 and 1991-2004. Our instrumental variables estimates for the earlier period suggest relatively large crime-prison effects. For the later time period, however, the effects of changes in incarceration rates on crime rates are much smaller.

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    File URL: http://dx.doi.org/10.1086/664073
    Download Restriction: Access to the online full text or PDF requires a subscription.

    File URL: http://dx.doi.org/10.1086/664073
    Download Restriction: Access to the online full text or PDF requires a subscription.

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    Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

    Volume (Year): 55 (2012)
    Issue (Month): 2 ()
    Pages: 275-310

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    Handle: RePEc:ucp:jlawec:doi:10.1086/664073
    Contact details of provider: Web page: http://www.journals.uchicago.edu/JLE/

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    1. Donohue, John J, III & Siegelman, Peter, 1998. "Allocating Resources among Prisons and Social Programs in the Battle against Crime," The Journal of Legal Studies, University of Chicago Press, vol. 27(1), pages 1-43, January.
    2. Francesco Drago & Roberto Galbiati & Pietro Vertova, 2009. "The Deterrent Effects of Prison: Evidence from a Natural Experiment," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 257-280, 04.
    3. Daniel Kessler & Steven D. Levitt, 1998. "Using Sentence Enhancements to Distinguish between Deterrence and Incapacitation," NBER Working Papers 6484, National Bureau of Economic Research, Inc.
    4. Steven D. Levitt, 1996. "The Effect of Prison Population Size on Crime Rates: Evidence from Prison Overcrowding Litigation," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 319-351.
    5. Emily G. Owens, 2009. "More Time, Less Crime? Estimating the Incapacitative Effect of Sentence Enhancements," Journal of Law and Economics, University of Chicago Press, vol. 52(3), pages 551-579, 08.
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