The Optimal Deterrence of Crime: A Focus on the Time Preference of DWI Offenders

TL;DR

This paper models how offenders' time preferences influence crime and proposes an optimal penal strategy, especially for DWI, by analyzing the distribution of discount rates and the effects of fines and imprisonment.

Contribution

It introduces a general model linking individual time discounting to crime propensity and empirically characterizes the discount rate distribution among offenders.

Findings

Discount rate distribution follows zero-inflated exponential distribution.

Optimal deterrence depends on fine amount and prison conditions.

Maximized net utility of penal strategy enhances crime prevention.

Abstract

We develop a general model for finding the optimal penal strategy based on the behavioral traits of the offenders. We focus on how the discount rate (level of time discounting) affects criminal propensity on the individual level, and how the aggregation of these effects influences criminal activities on the population level. The effects are aggregated based on the distribution of discount rate among the population. We study this distribution empirically through a survey with 207 participants, and we show that it follows zero-inflated exponential distribution. We quantify the effectiveness of the penal strategy as its net utility for the population, and show how this quantity can be maximized. When we apply the maximization procedure on the offense of impaired driving (DWI), we discover that the effectiveness of DWI deterrence depends critically on the amount of fine and prison condition.