Previous studies of the impact of changes in prisoner populations on crime rates have failed to adequately control for the simultaneity between those two variables. While increases in the number of prisoners are likely to reduce crime, rising crime rates also translate into larger prison populations. To break that simultaneity, this paper uses the status of prison overcrowding litigation in a state as an instrument for changes in the prison population. Overcrowding litigation is demonstrated to have a negative impact on prison populations, but is unlikely to be related to fluctuations in the crime rate, except through its effect on prison populations. Instrumenting results in estimates of the elasticity of crime with respect to the number of prisoners that are two to three times greater than previous studies. The results are robust across all of the crime categories examined. For each one-prisoner reduction induced by prison overcrowding litigation, the total number of crimes committed increases by approximately 15 per year. The social benefit from eliminating those 15 crimes is approximately $45,000; the annual per prisoner costs of incarceration are roughly $30,000.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
5119.
Length: Date of creation: May 1995 Date of revision: Handle: RePEc:nbr:nberwo:5119
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Find related papers by JEL classification: K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
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