Part 1 offers an introduction and summary of the paper, cautioning that simply because capital punishment might deter crime, does not necessarily mean that imposing this penalty is good policy. Other factors outside the purview of this paper should be considered in any discussion about the efficacy of imposing the death penalty, factors such as racial and socioeconomic patterns involved in the imposition of the death penalty. Part 2 examines early research on the deterrence capacity of the death penalty. Early research from the 1970’s and 1980’s reached conflicting results; some studies indicated a deterrent effect was achieved with the imposition of the death penalty, while other studies found no deterrent effect achieved through capital punishment. Part 3 reviews more recent research of the deterrent effects of capital punishment. Recent studies have overcome methodological difficulties associated with national time-series and cross-sectional data by employing panel-data techniques. The economics literature is reviewed, revealing a strong consensus that capital punishment does indeed deter crime. Economists have indicated that between 3 and 18 murders are deterred with each execution. Even crimes of passion, traditionally thought to be beyond deterrence, have decreased with the imposition of capital punishment. Research has not yet focused on the deterrent effect of capital punishment on acts of terrorism, but evidence from other studies indicates that capital punishment should deter at least some types of terrorist-perpetrated murders.