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There is reason to suggest that the for-profit nature of privately operated prisons drives incarceration, as these companies seek to maintain and expand their businesses. I make use of the variation in prison privatization among US states to examine its effects on levels of incarceration. Prison overcrowding is a key variable included in the analysis as it is often cited as a cause of prison privatization due to the putative cost efficiency of the private sector. Thus, this study can examine whether any potential association between prison privatization and incarceration is spurious due to the overcrowding of prisons. The results of my analysis will contribute to understanding the nature of how private prisons influence levels of incarceration at the state level.