Nber Working Paper Series Crime, Punishment, and Myopia

Economic theory predicts that increasing the severity of punishments will deter criminal behavior by raising the expected price of committing crime. This implicit price can be substantially raised by making prison sentences longer, but only if offenders’ discount rates are relatively low. We use a large sample of felony arrests to measure the deterrence effect of criminal sanctions. We exploit the fact that young offenders are legally treated as adults——and face longer lengths of incarceration——the day they turn 18. Sufficiently patient individuals should therefore significantly lower their offending rates immediately upon turning 18. The small behavioral responses that we estimate suggest that potential offenders are extremely impatient, myopic, or both. David S. Lee Department of Economics University of California, Berkeley 549 Evans Hall #3880 Berkeley, CA 94720-3880 and NBER [email protected] Justin McCrary Ford School of Public Policy and Department of Economics University of Michigan 440 Lorch Hall Ann Arbor, MI 48109-1220 [email protected]