Abstract
It is well-established argument in economic analysis of criminal policy that, as far as crime deterrence is concerned, we should first use the fine to its maximum before supplementing it with an imprisonment term. We show in this paper that this orthodox belief is wrong. When there is a spectrum of crimes that can be chosen by potential criminals with different levels of wealth, as is the case in reality, we show that a combination of imprisonment and a less-than-maximum fine may be more efficient in crime deterrence. © 1993.