Waiting to Execute: An Optimal Stopping Model of Capital Punishment Stays

Economists have made repeated efforts through both theoretical modeling and empirical testing to understand the deterrent effect of capital punishment. By and large, they have found a negative and statistically significant effect of capital punishment on the act of murder (that is, the death penalty deters murder). Ehrlich [1975] provides the first systematic analysis of the relationship between capital punishment and murder along with the first empirical test of the deterrence hypothesis concerning not only capital punishment but also other deterrent measures. His results suggest that on the average eight murder victims might have been saved as a result of one execution for the sample period 1933-67 in the United States. Although Ehrlich's work was criticized by scholars such as Waldo [1981] and Forst [1983], many subsequent studies, using independent time-series and cross-section data from the United States [Ehrlich, 1977; Layson, 1985; Cloninger, 1992; Ehrlich and Liu, 1999; Dezhbakhsh, et al. 2000], Canada [Layson, 1983] and the UK [Wolpin, 1978], have offered corroborating evidence consistent with the deterrence hypothesis.