We estimate the "incapacitation effect" on crime using variation
in Italian prison population driven by eight collective pardons
passed between 1962 and 1990. The prison releases are sudden
(within one day), very large (up to 35 percent of the entire prison
population), and happen nationwide. Exploiting this quasi-natural
experiment we break the simultaneity of crime and prisoners and,
in addition, use the national character of the pardons to separately
identify incapacitation from changes in deterrence. The elasticity
of total crime with respect to incapacitation is between -17 and
-30 percent. A cost-benefit analysis suggests that Italy's prison
population is below its optimal level.
Barbarino, Alessandro, and Giovanni Mastrobuoni.
"The Incapacitation Effect of Incarceration: Evidence from Several Italian Collective Pardons."
American Economic Journal: Economic Policy,
Illegal Behavior and the Enforcement of Law