I think that a recent spate of studies seem to suggest that there is some intrinsic deterrent value to capital punishment. These modes of analysis suggest that "capital punishment powerfully deters killings," and that such an effect justifies tougher legislation (such as "Three Strikes" approaches to legal adjudication) and harsher sentences with use of the death penalty as a force that can reverse the stem of criminal activity.
The basic argument that lies behind the deterrent theory within the death penalty suggests that criminals sense its use and plan accordingly based off of this reality. Proponents of the deterrent effect of the death penalty use this as part of their support as they suggest that criminals "rationally maximize their own self-interest (utility) subject to constraints (prices, incomes) that they face in the marketplace and elsewhere." The theory rests in the idea that criminal activity increases when there is a perceived belief that communities would not use the death penalty. Proponents of the deterrent effect of the death penalty argue that when criminals believe that death is not a realistic avenue that the legal system will pursue, they will be more likely to commit crime. It is in this way in which that the death penalty is seen as reducing criminal activity. Essentially, if a community does not avail itself of use of the death penalty, criminals recognize that they have a certain latitude in the committing of crimes. For the death penalty to have its deterrent effect, it must be used. When communities do use it and display a willingness to use it as enforcement. In doing so, communities increase the chance of reducing criminal activity.
The deterrent effect of the death penalty lies in a community's commitment to using it. Proponents argue that when criminals recognize that the death penalty will be used, it prevents recidivist activity from increasing and relays to other criminals that such actions will not be tolerated:
For each additional execution, on average, about five murders were deterred. Alternatively, for each additional commutation, on average, five additional murders resulted. A removal from death row by either state courts or the U.S. Supreme Court is associated with an increase of one additional murder.
It is in this light that proponents of capital punishment suggest that there is a deterrent effect intrinsic to its use.
Inmates can be on death row for up to 25 years nowadays, so the deterrent effect is certainly minimalized. Perhaps, then, the greatest deterrent to crime with the death penalty is that once a criminal is dead, he/she cannot commit another crime.
People who have worked in the criminal justice system know full well that so often if a criminal who has been convicted of murder is paroled or pardoned, he/she will likely kill again. If given the death penalty, at least the chances are the criminal will not return to society. (see the links below)