Abstract
This paper characterizes optimal criminal punishments when there are multiple interrelated crimes. Optimal punishments are functions of the extent to which related crimes are complements or substitutes weighted by their relative harms to society. The available empirical evidence on the relationship between index crimes in the United States suggests that tailoring criminal punishments properly to incorporate relationships between crimes could reduce the aggregate harm to victims by 3%, or about $8 billion dollars annually, holding enforcement expenditures fixed. The actual harm reduction of a marginal increase in arrests for an index crime is on average about 1.5-3 times greater than the harm reduction calculated without these effects.
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