|We specify a rational choice model of specific deterrence, perceived risk, and crime. Our model hypothesizes that criminal decision-making, including the weighing of costs and returns to crime, varies by whether youth have been arrested or jailed. We estimate an endogenous switching regression model to correct for nonrandom selection into sanction regimes. The statistical model specifies a selection model into sanction-which includes future crime-as well as separate equations for criminal behavior in each sanction regime. After correcting for nonrandom selection into formal sanction, we examine whether the effects of perceived risk of formal punishment, and risk of personal costs affect future crime for differently depending on experience with the criminal justice system. In other words, does the rational choice process vary depending on whether one has been punished or not. We can also examine different reduced-form models of sanction allocation that corresponds to different hypotheses about the unobserved selection process into sanction groups.
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