Criminal Discount Factors and Deterrence

52 Pages Posted: 7 Mar 2016

See all articles by Giovanni Mastrobuoni

Giovanni Mastrobuoni

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

David Rivers

University of Western Ontario - Department of Economics

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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: discounting, deterrence, collective pardon, recidivism

JEL Classification: D9, K4

Suggested Citation

Mastrobuoni, Giovanni and Rivers, David, Criminal Discount Factors and Deterrence. IZA Discussion Paper No. 9769. Available at SSRN: https://ssrn.com/abstract=2742557

Giovanni Mastrobuoni (Contact Author)

University of Turin - Collegio Carlo Alberto ( email )

Piazza Arbarello 8
Torino, Torino 10122
Italy

HOME PAGE: http://www.carloalberto.org/people/faculty/assistant-professors-and-chairs/mastrobuoni/

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

IZA ( email )

David Rivers

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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