Differentiating empirically between deterrence and incapacitation is difficult since both are a function of expected punishment. In this article we demonstrate that the introduction of sentence enhancements provides a direct means of measuring deterrence. Because the criminal would have been sentenced to prison even without the law change, there is no additional incapacitation effect from the sentence enhancement in the short run. Therefore, any immediate decrease in crime must be due to deterrence. We test the model using California's Proposition 8, which imposed sentence enhancements for a selected group of crimes. Proposition 8 appears to reduce eligible crimes by 4 percent in the year following its passage and 8 percent 3 years after passage. These immediate effects are consistent with deterrence. The impact of the law continues to increase 5-7 years after its passage, suggesting that incapacitation may be important as well. Copyright 1999 by the University of Chicago.