The Risks and Rewards of Criminal Activity: A Comprehensive Test of Criminal Deterrence

Abstract

Whereas previous analyses of criminal deterrence have focused on the effect of criminal enforcement on crime rates, this study analyzes the existence of compensating differentials for criminal pursuits. By analyzing the risk-rewards trade-off, this approach represents a more comprehensive test of the criminal deterrence hypothesis. The sample consisted of black inner-city youths who reported their crime participation, crime income, and self-assessed risks from crime. The risk premiums for the three principal adverse outcomes (arrest, conviction, and prison) constituted between one-half and two-thirds of all crime income on the average, providing strong support for the criminal deterrence hypothesis