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Does the Fear of Jail Actually Prevent Crime?

Does the risk of prison deter crime?

According to a brand-new and extensively covered study by the JFA Institute, a George Soros funded group, the U.S. prison system doesn’t deter crime and is "a costly and harmful failure.”

Prison is supposedly so useless that the U.S. prison population could be cut in half with no effect on crime.

This distrust of prison reducing crime is not new, but many have a hard time believing the simplest rule of economics: if you make something more costly, people do less of it. People accept that this principle applies to what we buy in grocery stores, but not to “bad” things that people might do.

So how plausible is deterrence? Let us take a couple examples from sports.

When college basketball’s Atlantic Coast Conference increased the number of referees per game from two to three in 1978, the number of fouls dropped by 34 percent. Why? Basketball players fouled less often because they were more likely to get caught. In fact, the actual decline in fouling was probably even larger, since fouls that may have gone unnoticed by two referees were more likely to be caught when there were three officials.

Baseball players respond no differently. The American League has more batters hit by pitchers than the National League, but this difference only occurred after 1973, when the American League removed its pitchers from the batting lineup in favor of designated hitters. Since American League pitchers no longer worried that they themselves would be hit in retaliation if they hit an opposing batter, they began throwing more beanballs.

Take another case where the “crime” becomes more profitable, specifically a type of fraud committed by air traffic controllers. To receive disability benefits due to job-related stress, air traffic controllers must present a well-documented stressful incident—a collision or close call—that has caused a deterioration in their performance.

Unsurprisingly, when it became easier to file for disability, flights suddenly started experiencing more “close calls.” And these were not cases that the air traffic controllers could simply make up; they were reported by a sophisticated performance evaluation called the “Operation Error Severity Index.”

Given these results, is it really difficult to believe, as the JFA Institute report claims, that the number of prisoners increased while crime rates fell? Is there really anything that makes criminals immune to these same forces?

A large number of studies indicate that the more certain the punishment, the fewer the crimes committed (for a survey click here.) Arrest rates of criminals are usually the single most important factor in reducing every type of crime. The death penalty may get the most media attention, as it deserves, but everyday police work is really important in making neighborhoods safer. Changes in the arrest rate account for about 16 to 18 percent of the large drop in the murder rate during the 1990s. Conviction rates explain another 12 percent.

By comparison, the death penalty execution rate accounts for about 12 to 14 percent of the overall drop in murders.

Prison stops crime in two ways: deterrence and incapacitation. The JFA Institute report misses both points. A longer prison term deters some would-be criminals from committing crimes to begin with. For those criminals who are not stopped by the threat of prison, at least they are taken off the streets and locked up, preventing them from committing yet more crime.

Longer prison sentences explain at least another 12 percent of the drop in murder rates. Why is it “at least”? Good data simply isn't available. It’s surprisingly difficult to measure how long criminals actually end up being in prison. The length of a criminal’s sentence is often much longer than the actual time served. Furthermore, the time that is served varies widely, even for a single type of crime, depending on a suspect’s criminal history and the severity of the offense.

The Department of Justice responded to the JFA Institute report by claiming that 25 percent of the drop in violent crime during the 1990s was due to increased imprisonment. But, unfortunately, the research that they cited only looks at the percent of people in prison, not other factors that are correlated with imprisonment such as arrest and conviction rates, thus falsely attributing too much of the drop to prison.

Economics explains something else about the drops in crime rates. Everyone knows how violent crime fell dramatically during the 1990s. What is less commonly understood is that the drop was much bigger than reported by the FBI Uniform Crime Reports.

With the exception of the data on murder, the FBI crime data are based on crimes that victims reported to police departments. But, of course, not every victim reports when a crime occurs. Victims are most likely to report two kinds of crimes: the most serious crimes, and the ones that they believe have the greatest chance of being solved. As arrest and conviction rates rose, victims more frequently reported crimes committed against them. Increasing the rate that crimes were reported makes it look as if crime rates are not falling as much as they actually are.

These changes are not trivial. For example, if the rate of reporting violent crimes had remained constant and not increased after 1999, the violent crime rate in 2005 would have fallen to 390 per 100, 000 people, not 469, a 17 percent lower rate than it actually was in 2005.

The JFA Institute sees it as a good sign that states are starting to shorten prison sentences to save money. Possibly states do have more important things to spend money on. But economists have a simple prediction: less imprisonment, more crime.

John Lott is the author of Freedomnomics, upon which this piece draws, and a senior research scholar at the University of Maryland.