How Much Do Offenders Value Freedom? Stated Reservation Wages and Willingness to Accept Crime Risk

• In Event: New and Creative Ways to Study Responses to Sanctions and Risk

Abstract

Income earned from illegal activities has recently become an important line of inquiry for individual-level studies of offender decision-making, yet research linking monetary rewards to how offender ultimately choose to engage in certain crimes has been limited by several important shortcomings. First, there is little understanding of how incentives required for participation differ across types of crime. Second, most analyses relate factors such as reported illicit income to an observed offending outcome (i.e., offend or not). This type of revealed preference analysis does not allow for a fuller understanding of the offender’s true reservation wage, which is the lowest wage an offender would be willing to accept for participation in certain crimes. Third, we know little about how these reservation wages vary both within active offenders and between offenders and non-offenders. The current study seeks to begin to address these issues by analyzing data from a sample of incarcerated offenders on their stated reservation wage for certain illegal activities. Specifically, we consider how both individual and contextual level factors (e.g., costs and risks to the crime) relate to individuals stated willingness to accept crime risks for certain illegal activities.

Authors

• Thomas Loughran, University of Maryland

• Holly Nguyen, Pennsylvania State University

• Raymond Paternoster, University of Maryland