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This study explores the impact of incarceration on crime rates, utilizing a dynamic adjustment model. By analyzing data from 1978 to 2004, the research presents estimates for different sub-periods, challenging previous findings.
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How Much Crime Reduction Does the Marginal Prisoner Buy? Rucker Johnson Goldman School of Public Policy UC Berkeley Steven Raphael Goldman School of Public Policy UC Berkeley
Basic Identification Strategy • Shocks to underlying criminal behavior have immediate as well as lagged effects on annual incarceration rates. • Changes in crime in a period when there is a shock to criminal behavior will be driven by the change in behavior as well as any changes in incarceration. • Change in crime along the dynamic adjustment path between equilibrium crime rates will be driven by changes in incarceration alone.
A simple non-behavioral model of the incapacitation effects of prison on crime
Characterizing the dynamic adjustment paths of incarceration and crime to a permanent shock to criminality
We can derive a similar equilibrium adjustment path for crime • Note, the first term in crime adjustment path is positive yet diminishing in time, t. • The second term is equal to the equilibrium crime rate for t>0. • Together, the two components indicate that an increase in c causes a discrete increase in crime above the new long-term equilibrium and then adjusts to the new equilibrium from above.
Incarceration rate S*, t>0 S*, t=0 t=0 t=1 Time since shock
Incarceration rate Crimerate S*, t>0 C*, t>0 S*, t=0 C*, t=0 t=0 t=1 Time since shock
Deriving explicit expressions for the periodic changes in incarceration and crime for t=0 and t=1 where ΔSt=St+1-St Changes in the incarceration rate
Implementing the identification strategy using a state-level panel data set • Estimating cp and θ by state and year • Identifying permanent shocks and adopting the identification strategy to the reality of serial shocks to the underlying transition probabilities rather than single shocks.
Remaining data issues • Data covers the periods from 1978 to 2004. We present estimates for the entire period and separately for two sub-periods. • Data on crime (7 part 1 felony offenses) from the Uniform Crime Reports • Population totals come from the Census bureau as do a number of state-level demographic measures. • Regional economic indicators come from either the Bureau of Labor Statistics or the Bureau of Economic Analysis.
Comparison of these results to those from previous research • Our violent crime-prison elasticity estimates range from -0.06 to -0.113 and property crime estimates range from -0.15 to -0.21. • Levitt (1996) estimates range from -0.38 to -0.42 for violent crime and -0.26 to -0.32 for property crime.