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The Deterrence Effect of Prison: Dynamic Theory and Evidence

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  • McCrary, Justin
  • Lee, David S.

Abstract

Using administrative, longitudinal data on felony arrests in Florida, we exploit the discontinuous increase in the punitiveness of criminal sanctions at 18 to estimate the deterrence effect of incarceration. Our analysis suggests a 2 percent decline in the log-odds of offending at 18, with standard errors ruling out declines of 11 percent or more. We interpret these magnitudes using a stochastic dynamic extension of Becker's (1968) model of criminal behavior. Calibrating the model to match key empirical moments, we conclude that deterrence elasticities with respect to sentence lengths are no more negative than -0.13 for young offenders.

Suggested Citation

  • McCrary, Justin & Lee, David S., 2009. "The Deterrence Effect of Prison: Dynamic Theory and Evidence," Berkeley Olin Program in Law & Economics, Working Paper Series qt2gh1r30h, Berkeley Olin Program in Law & Economics.
    • Handle: RePEc:cdl:oplwec:qt2gh1r30h
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