When does crime respond to punishment?: Evidence from drug-free school zones

Abstract

Economic theory suggests that crime should respond to punishment severity. However, empirical evidence on this link is ambiguous. We propose one explanation for this discrepancy: Punishments deter crime but only when the probability of detection is moderate. Using increases in punishment severity in drug-free school zones along with changes in the probability of detection resulting from a community crime-monitoring program, we demonstrate that drug-related crime drops in blocks just within the drug-free school zones, where punishments are more severe, but only if the monitoring intensity – and hence the probability of detection – is at intermediate levels.