XPFs, the subject of this Article, include matters as diverse as an offender’s apology, remorse, history of good or bad deeds, public acknowledgment of guilt, special talents, old age, extralegal suffering from the offense, as well as forgiveness or outrage by the victim, and special hardship of the punishment for the offender or his family. Such XPFs can make a difference at any point in the criminal justice process at which decisionmakers exercise discretion, such as when prosecutors decide what charge to press, when judges decide which sentence to impose, when parole boards decide when to release a prisoner, and when executive officials decide whether to grant clemency, as well as in less-visible exercises of discretion, such as in decisions by police officers and trial jurors.

After a review of the current use and rationales behind eighteen common XPFs in Part I, the Article reports in Part II the results of an empirical study of lay intuitions regarding the propriety of taking such factors into account in adjusting the punishment that otherwise would be imposed, the extent of any adjustment to be made, as well as an assessment of how the views might change with different kinds of offenses and how they might vary with demographic factors.

Part III examines the implications of the study findings for current law and practice, with special attention to the problem of disparity in application that is invited by the high levels of disagreement on the proper role of some XPFs and the problem of conflicts between lay intuitions and current law and practice. It is not uncommon that there is strong support for reliance upon XPFs that current practice ignores, and little support for reliance upon XPFs that current practice commonly relies upon.

This Article suggests that there is a common denominator to these and other puzzles: they are all best answered on the basis of loss aversion. Numerous psychological studies have established that people do not perceive outcomes as final states of wealth or welfare. Rather, they perceive them as gains and losses, and losses ordinarily loom larger than gains. The law protects people from losing much more than it ensures gaining. Loss aversion is thus related to fundamental characteristics of entire legal fields and their relative importance.

In addition to elucidating the correlation between loss aversion and the law, the Article strives to explain this compatibility. One theory is evolutionary. Since people experience losses as more painful than unattained gains, they file lawsuits for recovery of losses much more often than for unattained gains. Consequently, legal doctrines dealing with the former are much more developed. Another theory focuses on the mindset of legal policymakers. Legal thinking largely follows commonsense morality, which conforms to moderate deontology. As such, it inevitably distinguishes between harming people and not aiding them. This theory thus highlights an important correspondence between psychology, morality, and law.

Finally, the Article explores various normative implications of loss aversion. Among other things, it argues that, ceteris paribus, the law should favor not giving over taking. Lawmakers should consider the framing effect of legal norms and the impact of loss aversion on policymaking.