Sensitivity Analyses of the Deterrence Hypothesis: Let's Keep the Econ in Econometrics

34 Pages Posted: 7 Feb 2007

See all articles by Isaac Ehrlich

Isaac Ehrlich

State University of New York at Buffalo - Department of Economics; National Bureau of Economic Research (NBER); University of Chicago - University of Chicago Press; Institute for the Study of Labor (IZA)

Zhiqiang Liu

SUNY at Buffalo, College of Arts & Sciences, Department of Economics

Multiple version iconThere are 2 versions of this paper

Abstract

Leamer and McManus applied Extreme Bound Analysis (EBA) in an empirical study of the deterrent effects of capital punishment and other penalties. Their analysis has questioned the validity of the deterrence hypothesis. The thrust of our paper is twofold: first, by applying EBA to well-known econometric models of demand, production, and human-capital investment, our analysis exposes and illustrates the inherent flaws of EBA as a method of deriving valid inferences about model specification. Second, since the analysis shows Leamer and McManus's inferences about deterrence to be based on a flawed methodology, we offer an alternative, theorybased sensitivity analysis of estimated deterrent effects using similar data. Our analysis supports the deterrence hypothesis. More generally, it emphasizes the indispensable role of theory in guiding sensitivity analyses of model specification.

Suggested Citation

Ehrlich, Isaac and Liu, Zhiqiang, Sensitivity Analyses of the Deterrence Hypothesis: Let's Keep the Econ in Econometrics. Journal of Law & Economics, Vol. 42, No. 1, pp. 455-87, April 1999. Available at SSRN: https://ssrn.com/abstract=961447

Isaac Ehrlich (Contact Author)

State University of New York at Buffalo - Department of Economics ( email )

415 Fronczak Hall
Buffalo, NY 14260
United States
716-645 2121 (Phone)
716-645 2127 (Fax)

HOME PAGE: http://arts-sciences.buffalo.edu/economics/faculty/faculty-directory/ehrlich.html

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Chicago - University of Chicago Press ( email )

1427 E. 60th Street
Chicago, IL 60637
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Zhiqiang Liu

SUNY at Buffalo, College of Arts & Sciences, Department of Economics ( email )

Buffalo, NY 14260
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
539
rank
8,917
Abstract Views
1,714
PlumX Metrics