The authors gratefully acknowledge the comments and suggestions of two anonymous referees and colleagues from Deakin University, in particular Dr. Samarth Vaidya and Associate Professor Phillip Hone. Any errors or omissions are the sole responsibility of the authors.
Some Empirical Evidence on Offender Time Discount Rates
Article first published online: 28 JUN 2012
© 2012 The Economic Society of Australia
Economic Papers: A journal of applied economics and policy
Volume 31, Issue 2, pages 192–201, June 2012
How to Cite
Torre, A. and Wraith, D. (2012), Some Empirical Evidence on Offender Time Discount Rates. Economic Papers: A journal of applied economics and policy, 31: 192–201. doi: 10.1111/j.1759-3441.2011.00152.x
- Issue published online: 28 JUN 2012
- Article first published online: 28 JUN 2012
- time discount rate;
- plea choice;
- specific deterrence
The conventional wisdom is that offenders have very high discount rates not only with respect to income and fines but also with respect to time incarcerated. These rates are difficult to measure objectively and the usual approach is to ask subjects hypothetical questions and infer time preference from their answers. In this article, we propose estimating rates at which offenders discount time incarcerated by specifying their equilibrium plea, defined as the discount rate, which equates the time and expected time spent in jail following a guilty plea and a trial. Offenders are assumed to exhibit positive time preference and discount time spent in jail at a constant rate. Our choice of sample is interesting because the offenders are not on bail, punishment is not delayed and the offences are planned therefore conforming to Becker’s model of the decision to commit a crime. Contrary to the discussion in the literature, we do not find evidence of consistently high time discount rates, and therefore cannot unequivocally infer that the prison experience always results in low levels of specific deterrence.