IT IS SUGGESTED THAT THE INDIVIDUAL'S UTILITY FUNCTION APPROPRIATE TO A DECISION INVOLVING POSSIBLE IMPRISONMENT IS A REAL-VALUED CONTINUOUS FUNCTION OF THE FOLLOWING FORM: U=U(W,S). W REPRESENTS THE INDIVIDUAL'S WEALTH EXCLUDING THE EFFECTS OF PUNISHMENT, OR THE SUM OF HIS ASSETS AND THE PRESENT VALUE OF HIS LIFETIME EARNINGS, DISCOUNTED FOR TIME AND RISKS, ASSUMING THAT HE IS NOT SUBJECTED TO PENALTY, AND S REPRESENTS THE LENGTH OF THE PRISON TERM. USING THIS FRAMEWORK, THE RELATIVE DETERRENT EFFECTS OF CERTAINTY AND SEVERITY IN PUNISHMENT ARE EXPLAINED WITHOUT IMPUTING ANY SPECIAL BEHAVIORAL CHARACTERISTICS TO THE CLASS OF INDIVIDUALS WHO COMMIT OFFENSES. IN ADDITION, THE EFFECT OF CHANGES IN THE INDIVIDUAL'S INITIAL WEALTH AND PAYOFF TO CRIME ON HIS WILLINGNESS TO ENGAGE IN CRIME IS EXAMINED. THE MODEL IS THEN USED TO ANALYZE THE INDIVIDUAL'S CHOICE OVER PUNISHMENTS ONCE APPREHENDED, PARTICULARLY IN THE CASE OF PLEA BARGAINING. (AUTHOR ABSTRACT MODIFIED)...ELW