In 1996, economist Steven Levitt published in a leading economics journal an analysis of elasticities of crime. Levitt’s abstract began by declaring his technical innovation for treating intricate causal relations:
Simultaneity between prisoner populations and crime rates makes it difficult to isolate the causal effect of changes in prison populations on crime. To break that simultaneity, this paper uses prison overcrowding litigation in a state as an instrument for changes in the prison population.
Then his paper reported his elasticity estimates:
The resulting elasticities are two to three times greater than those of previous studies. A one-prisoner reduction is associated with an increase of fifteen Index I crimes per year.^
A one-prisoner change in imprisonment is a situation that a prosecutor might ponder in considering whether to charge someone with a wide array of crimes and then to seek a guilty plea on at least one of them. Is Levitt’s analysis relevant to that one-prisoner prosecutorial decision? More generally, in what social, criminal, and prison circumstances, at what magnitude of imprisonment, and at what scale change in imprisonment is Levitt’s analysis empirically relevant? An elasticity of crime abstracts from those questions. Abstracting from such questions promotes the value of economic analysis by enhancing its apparent generality.
Consider some circumstances concerning imprisonment in the U.S. In the U.S. from 1971 to 1996, the number of prisoners sentenced to more than one year of imprisonment grew an unprecedented 474%. The share of prisoners with drug offenses as their most serious offense rose from 9% to 24%. At year-end 1996, the U.S. had in prison 611 persons per 100,000 residents. U.S. incarceration prevalence was about the same as incarceration prevalence in Russia, which had the highest incarceration prevalence about 1996 in a dataset covering nearly all countries. Moreover, 65% of countries had an incarceration prevalence less than or equal to 150 persons per 100,000 residents. Thus, in 1996, the extent of U.S. incarceration was extremely high relative to U.S. history and to contemporary international comparisons. Nonetheless, the U.S. has continued to incarcerate a larger share of its population. In 2010, U.S. incarceration prevalence reached 733 prisoners per 100,000 residents.
An elasticity of crime obscures the specific historical circumstances. In a paper published in an economics journal in 2004, Levitt used his 1996 estimates of the elasticity of crime to explain part of the crime reduction in the U.S. from 1991 to 2001. Within that same analysis, those elasticities do not contribute to a satisfactory explanation for U.S. crime trends from 1973 to 1991. However, in his 1996 paper, Levitt estimated his elasticities of crime using U.S. state-level data from 1971 to 1993. Levitt’s elasticities of crime apparently work better in explaining crime across years for which they are less directly relevant.^
The value of an elasticity of crime seems to depend on idiosyncratic deliberative circumstances. In his 1996 scholarly paper estimating elasticities of crime, Levitt offered the following conclusions:
While calculations of the costs of crime are inherently uncertain, it appears that the social benefits associated with crime reduction equal or exceed the social costs of incarceration for the marginal prisoner. …
If anything, the results of this paper suggest that increasing the amount of time served by the current pool of prisoners would be socially beneficial.^
Levitt co-authored a paper, published in 2004, that presented more elasticities of crime. This paper focused on incarcerating drug offenders. Its results affirmed that incarcerating drug offenders had a similar effect to incarcerating other offenders. Nonetheless, this paper suggested that existing levels of incarceration were excessive:
On the margin, locking up drug-offenders has roughly the same impact on violent and property crime as incarcerating other types of criminals. …
The question of foremost public policy interest related to our work is whether or not the investment in drug-offender incarceration has been cost effective. A serious cost-benefit analysis is beyond the scope of this paper, but a few points are worth making. First, for typical values of the costs of crime, even the most generous estimates of the crime reduction attributable to prison (Levitt, 1996) suggest that current levels of incarceration are excessive. Thus, it is not easy to justify drug imprisonment based on associated declines in violent and property crime alone.^
The reason for the difference between Levitt’s 1996 conclusions and these conclusions cannot be found easily in the papers’ technical analysis of causation. The U.S. level of incarceration in 2004, 729 inmates per 100,000 residents, like the corresponding figure of 611 in 1996, is extraordinarily high from historical and cross-country perspectives. Deliberative circumstances offer an alternative perspective on causation. Levitt in 2004 had greater disciplinary status and hence probably benefited less from making provocative claims. In addition, most persons, especially academics, tend to be more sympathetic to drug offenders than to other types of offenders. These deliberative circumstances seem to explain better than any obvious reasons within his papers’ technical analyses the differences in Levitt’s conclusions.