Working Paper: NBER ID: w8489
Authors: Ilyana Kuziemko; Steven D. Levitt
Abstract: The number of prisoners incarcerated on drug-related offenses rose fifteen-fold between 1980 and 2000. This paper provides the first systematic empirical analysis of the implications of that dramatic shift in public policy. We show that the increase in drug prisoners led to reductions in expected time served for other crimes, especially for less serious offenses. Reductions in time served, however, increased other crimes by no more than a few percent. Moreover, incarcerating drug offenders is found to be almost as effective in reducing violent and property crime as locking up other types of offenders. We estimate that cocaine prices are 10-15 percent higher today as a consequence of increases in drug punishment since 1985. Based on previous estimates of the price elasticity of demand for cocaine, this implies a reduction in cocaine consumed of as much as 20 percent.
Keywords: drug policy; incarceration; crime rates; cocaine prices
JEL Codes: K4; H7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increase in drug prisoners (K14) | reductions in the expected time served for other crimes (K14) |
| reductions in the expected time served for other crimes (K14) | increase in other crimes (K42) |
| incarcerating drug offenders (K14) | reducing violent and property crime (K42) |
| increases in drug punishment (K42) | increases in cocaine prices (E30) |
| increases in cocaine prices (E30) | reduction in cocaine consumption (D18) |