The economics of crime and the criminal justice system.

• Author: Levitt, Steven D.

My recent empirical research focuses on crime and the criminal justice system. Within this broad area, three primary themes emerge: identifying the causal link between criminal justice policies and crime rates; differentiating empirically between deterrence and incapacitation; and using nonstandard data sources to test economic theories. This synopsis of my research is organized around these themes.

Identifying the Causal Link Between Criminal Justice Policies and Crime Rates

Differentiating between correlation and causality is critical when analyzing the impact of crime policies. For instance, Newark has a violent crime rate four times higher than that of Omaha, and it also has twice as many police per capita. A likely explanation for this relationship, however, is that high crime rates lead cities to hire more police, not that police cause crime. Similarly, when crime is rising, prison populations also tend to rise. This is not surprising: if criminals continue to be caught and punished at a constant rate, then the prison population should mechanically rise one-for-one with the crime rate. From the perspective of ideal public policy, reliance on such correlations provides no guidance. Identifying the causal link between increases in police and the number of prisoners and crime is necessary.

I have examined the impact of police on crime, using the timing of mayoral and gubernatorial elections as "instruments" for changes in the police force.(1) Indeed, the size of the police force appears to be affected by election timing. Over a 25-year period, the average increase in the size of the police force in large U.S. cities in mayoral election years was 2 percent; in gubernatorial election years it was 2.1 percent, and in nonelection years there was no change. It appears that incumbent politicians attempt to bolster their re-election prospects by appearing "tough on crime." If elections do not otherwise affect crime rates (after controlling for other factors that may be influenced by elections, such as changes in the local economy), then electoral cycles may plausibly influence changes in the police force. In one set of estimates, I find a positive relationship between police and crime. But when I include elections in the analysis the sign reverses, and police appear to significantly reduce crime.

In a related paper, I consider the relationship between the number of prisoners and crime rates.2 In this paper, I use prison overcrowding lawsuits as...