Is Harsher Punishment the Solution? : A Cost-benefit Analysis of a Swedish Crime Policy

Abstract: In this thesis we analyse the economic effects of a policy proposal in Sweden, which implies a removal of the sentence reduction for 18- to 20-year-old offenders. We use a cost-benefit analysis (CBA) to systematically assess its effects. Our results indicate that the policy proposal is most likely beneficial to society, a conclusion which is strengthened by our sensitivity analysis. Our CBA builds upon Becker’s (1968) economic model of crime, and the extensive literature it has inspired which explores the effects of harsher punishment on crime. In order to assess how a harsher sentencing regime affects society, we use crime-punishment elasticities and costs of crime based on previous studies and own estimations. Our main contribution to the existing literature is twofold. First, we provide an economic dimension to a current political issue. Second, we employ a CBA to a research area in Sweden in which the method has been used sparingly. Knowing how an increase in punishment affects crime rates is of great importance for policy making. Hence, we encourage further analysis in this area, especially in Sweden.