Congratulations to Olivia (Livvy) Mitchell, who was awarded the 2021 A. R. Bergstrom Prize in Econometrics for her paper “A Policy Evaluation of Home Detention Sentencing: Evidence from New Zealand”. The Bergstrom Prize, which is administered by the New Zealand Association of Economists Education Trust, can be awarded every two years and aims to reward the achievement of excellence in econometrics as evidenced by a research paper in any area of econometrics.

Olivia’s paper investigates the causal effects of New Zealand’s 1 October 2007 introduction of home detention as a stand-alone sentence on offender recidivism and labour market attachment. To determine the local average treatment effects of home detention, relative to similarly ranked sentences, the paper employs fuzzy regression discontinuity design and two-staged least squares instrumental variables applied to population-wide data from the Integrated Data Infrastructure managed by Statistics New Zealand.

The analysis shows no evidence that home detention affects the recidivism rate of first-time offenders, a result counter to a 2011 review by the Ministry of Justice, or that home detention increases the offender’s attachment to the labour market. A range of robustness tests indicate that the overall conclusions are not sensitive to variations in estimation methods, offender sample, recidivism period and definition, sentence categorization rules, and re-offence type.

Olivia interprets the results to imply that there is little justification for promoting home detention as a means for reducing crime or improving offenders’ short-term or long-term labour market positions. Nevertheless, as noted in the paper, the clear benefits of expanding New Zealand’s home detention scheme are the cost-savings to the taxpayers and the easing of prison overpopulation.

In their assessment of Olivia’s paper the adjudicators, Dr Iris Claus, Professor Mark Holmes, and Dr Leo Krippner, were highly complimentary. “The paper is well written and structured. The econometric methods are carefully explained and the author appears to be well on top of the econometric theory and application.” More generally, the adjudicators noted that Olivia’s paper provides an excellent example of how careful econometrics can contribute to public policy debates, in this case about the effectiveness of home detention in New Zealand.