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Criminal Discount Factors and Deterrence

Author

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  • Mastrobuoni, Giovanni

    (Collegio Carlo Alberto)

  • Rivers, David A.

    (University of Western Ontario)

Abstract

The trade-off between the immediate returns from committing a crime and the future costs of punishment depends on an offender's time discounting. We exploit quasi-experimental variation in sentence length generated by a large collective pardon in Italy and provide non-parametric evidence on the extent of discounting from the raw data on recidivism and sentence length. Using a discrete-choice model of recidivism, we estimate an average annual discount factor of 0.74, although there is heterogeneity based on age, education, crime type, and nationality. Our estimates imply that the majority of deterrence is derived from the first few years in prison.

Suggested Citation

  • Mastrobuoni, Giovanni & Rivers, David A., 2016. "Criminal Discount Factors and Deterrence," IZA Discussion Papers 9769, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9769
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    Cited by:

    1. Mueller-Smith, Michael & Schnepel, Kevin T., 2016. "Avoiding Convictions: Regression Discontinuity Evidence on Court Deferrals for First-Time Drug Offenders," IZA Discussion Papers 10409, Institute of Labor Economics (IZA).
    2. Basiglio, Stefania & Foresta, Alessandra & Turati, Gilberto, 2024. "Impatience and crime. Evidence from the NLSY97," Journal of Economic Psychology, Elsevier, vol. 101(C).
    3. Thushyanthan Baskaran & Sonia Bhalotra & Brian Min & Yogesh Uppal, 2024. "Women legislators and economic performance," Journal of Economic Growth, Springer, vol. 29(2), pages 151-214, June.
    4. Francesco Drago & Roberto Galbiati & Francesco Sobbrio, 2020. "The Political Cost of Being Soft on Crime: Evidence from a Natural Experiment," Journal of the European Economic Association, European Economic Association, vol. 18(6), pages 3305-3336.
    5. Andrew Leigh, 2020. "The Second Convict Age: Explaining the Return of Mass Imprisonment in Australia," The Economic Record, The Economic Society of Australia, vol. 96(313), pages 187-208, June.
    6. Steeve Marchand & Guy Lacroix & William Arbour, 2023. "Prison rehabilitation programs and recidivism: evidence from variations in availability," Melbourne Institute Working Paper Series wp2023n07, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    7. Victor H Aguiar & Nail Kashaev, 2021. "Stochastic Revealed Preferences with Measurement Error [Consistency between Household-level Consumption Data from Registers and Surveys]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(4), pages 2042-2093.
    8. Bruno Chiarini & Elisabetta Marzano, 2016. "Is the Severity of the Penalty an Effective Deterrent? A Strategic Approach for the Crime of Tax Evasion," CESifo Working Paper Series 6112, CESifo.
    9. Giovanni Mastrobuoni & David A Rivers, 2019. "Optimising Criminal Behaviour and the Disutility of Prison," The Economic Journal, Royal Economic Society, vol. 129(619), pages 1364-1399.
    10. A. Mitchell Polinsky & Paul N. Riskind, 2017. "Deterrence and the Optimal Use of Prison, Parole, and Probation," NBER Working Papers 23436, National Bureau of Economic Research, Inc.
    11. Schneider, Andreas, 2019. "Deterrence Theory in Paraguay: Exploring Fraud and Violation of Trust Cases," MPRA Paper 102204, University Library of Munich, Germany.
    12. William Arbour & Guy Lacroix & Steeve Marchand, 2021. "Prison Rehabilitation Programs: Efficiency and Targeting," Working Papers tecipa-684, University of Toronto, Department of Economics.
    13. Campaniello, Nadia & Gavrilova, Evelina, 2018. "Uncovering the gender participation gap in crime," European Economic Review, Elsevier, vol. 109(C), pages 289-304.
    14. repec:hal:spmain:info:hdl:2441/12b1pd86do8s6p35b4jqn66t0p is not listed on IDEAS
    15. Roee Sarel, 2022. "Crime and punishment in times of pandemics," European Journal of Law and Economics, Springer, vol. 54(2), pages 155-186, October.
    16. Francesco Drago & Roberto Galbiati & Francesco Sobbrio, 2020. "The Political Cost of Being Soft on Crime: Evidence from a Natural Experiment," Journal of the European Economic Association, European Economic Association, vol. 18(6), pages 3305-3336.
    17. Andreas Schneider, 2019. "Deterrence Theory in Paraguay: Exploring Fraud and Violation of Trust Cases," Social Sciences, MDPI, vol. 8(1), pages 1-17, January.
    18. Zanella, Giulio, 2020. "Prison Work and Convict Rehabilitation," IZA Discussion Papers 13446, Institute of Labor Economics (IZA).
    19. Libor Dušek & Christian Traxler, 2024. "Swiftness and Delay of Punishment," CESifo Working Paper Series 10906, CESifo.
    20. Lia Q. Flores & Julian Jamison, 2023. "Predicting life outcomes with automatic thinking measures in a marginalized population," Economics Series Working Papers 1005, University of Oxford, Department of Economics.
    21. Mueller-Smith, Michael & Schnepel, Kevin T., 2016. "Avoiding Convictions: Regression Discontinuity Evidence on Court Deferrals for First-Time Drug Offenders," Working Papers 2016-16, University of Sydney, School of Economics.

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    More about this item

    Keywords

    discounting; deterrence; collective pardon; recidivism;
    All these keywords.

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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