Criminal Discount Factors and Deterrence

Giovanni Mastrobuoni () and David Rivers

No 9769, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 (search for similar items in EconPapers)
JEL-codes: D9 K4 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2016-02
New Economics Papers: this item is included in nep-law
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Citations: View citations in EconPapers (34)

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