An Empirical Analysis of Imprisoning Drug Offenders
The number of prisoners incarcerated on drug-related offenses rose 15-fold between 1980 and 2000. This paper provides the first systematic empirical analysis of the implications of that dramatic shift in public policy. We estimate that cocaine prices are 5-15% higher today as a consequence of increases in drug punishment since 1985, presumably leading to reduced drug consumption. Incarcerating drug offenders is found to be almost as effective in reducing violent and property crime as locking up other types of offenders. Thus, although we demonstrate that the increase in drug prisoners led to reductions in expected time served for other crimes (especially for less serious offenses), the overall impact of increased drug incarceration has likely been a small (1-3%) reduction in violent and property crime. Back-of-the envelope estimates suggest that it is unlikely that the dramatic increase in drug imprisonment was cost-effective.
Journal of Public Economics