How Much Crime Reduction Does the Marginal Prisoner Buy?
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.
Year of publication: |
2012
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Authors: | Johnson, Rucker ; Raphael, Steven |
Published in: |
Journal of Law and Economics. - University of Chicago Press. - Vol. 55.2012, 2, p. 275-275
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Publisher: |
University of Chicago Press |
Saved in:
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