Statistical Variability and the Deterrent Effect of the Death Penalty

In a recent paper Donohue and Wolfers (D&W) critique a number of modern econometric studies purporting to demonstrate a deterrent effect of capital punishment. This paper focuses on D&W's central criticism of a study by Zimmerman; specifically, that the estimated standard errors on the subset of his regressions that suggest a deterrent effect are downward biased due to autocorrelation. The method that D&W rely upon to adjust Zimmerman's standard errors is, however, potentially problematic, and is also only one of several methods to address the presence of autocorrelation. To this end, Zimmerman's original models are subjected to several parametric corrections for autocorrelation, all of which result in statistically significant estimates that are of the same magnitude to his original estimates. The paper also presents results obtained from an alternative model whose specification is motivated on theoretical and statistical grounds. These latter results also provide some evidence supporting a deterrent effect. Finally, the paper discusses D&W's use of randomization testing and their contention that executions are not carried out often enough to plausibly deter murders