Optimal Imprisonment and Fines with Non-Discriminatory Sentences
9 Pages Posted: 14 May 2019 Last revised: 16 May 2019
Date Written: May 4, 2019
When considering the optimal combination of monetary sanctions (costless) and imprisonment (costly) as deterrents, the traditional result is that imprisonment should not be imposed until monetary sanctions are completely exhausted. Therefore, imprisonment acts as a mere supplement to maximal fines. We show that, when wealth varies across individuals, it could be efficient to use imprisonment in combination with fines that do not exhaust the wealth of all individuals. The rationale is that, generally, it is impractical to tailor criminal sanctions as a continuous function of individuals' wealth.
Keywords: Optimal Enforcement, Imprisonment, Fines
JEL Classification: K0, K4
Suggested Citation: Suggested Citation