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An Economic Analysis of the Criminal Law as a Preference-Shaping Policy

38 Pages Posted: 28 Apr 2005  

Kenneth Glenn Dau-Schmidt

Indiana University Maurer School of Law


In this Article I provide an economic analysis of criminal law as a preference-shaping policy. I argue that in addition to creating disincentives for criminal activity, criminal punishment is intended to promote various social norms of individual behavior by shaping the preferences of criminals and the population at large. By taking into account this preference-shaping function, I explain many of the characteristics of criminal law that have heretofore escaped the logic of the economic model. It is also the preference-shaping function and the prerequisite ordering of preferences that distinguish criminal law from tort law. My analysis suggests that society will make an activity a crime whenever the social benefits of changing individual preferences through criminal punishment outweigh the social costs. However, since this weighing of social costs and benefits is conducted through a political process on the basis of ethical and moral standards and requires estimates of the costs of changing opportunities and preferences, I conclude that other disciplines can usefully inform the economic model of criminal law.

Keywords: Criminal Law, Crime, Law and Economics, Preferences

JEL Classification: A12, A13, K14, K42

Suggested Citation

Dau-Schmidt, Kenneth Glenn, An Economic Analysis of the Criminal Law as a Preference-Shaping Policy. Duke Law Journal, Vol. 1990, No. 1. Available at SSRN:

Kenneth Glenn Dau-Schmidt (Contact Author)

Indiana University Maurer School of Law ( email )

211 S. Indiana Avenue
Bloomington, IN 47405
United States
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