Criminal Discount Factors and Deterrence

50 Pages Posted: 12 Feb 2016  

Giovanni Mastrobuoni

University of Essex - Department of Economics; IZA; University of Torino - Collegio Carlo Alberto

David A. Rivers

University of Western Ontario - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 7, 2016

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.

Keywords: crime, discounting, deterrence

JEL Classification: D9, K4

Suggested Citation

Mastrobuoni, Giovanni and Rivers, David A., Criminal Discount Factors and Deterrence (February 7, 2016). Available at SSRN: https://ssrn.com/abstract=2730969 or http://dx.doi.org/10.2139/ssrn.2730969

Giovanni Mastrobuoni

University of Torino - Collegio Carlo Alberto ( email )

via Real Collegio 30
Moncalieri, Torino 10024
Italy

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

IZA ( email )

David A. Rivers (Contact Author)

University of Western Ontario - Department of Economics ( email )

Social Science Centre, Room 4071
London, Ontario N6A 5C2
Canada
519-661-2111 ext. 80446 (Phone)
519-661-3666 (Fax)

HOME PAGE: http://publish.uwo.ca/~drivers2/

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