The US has been the world leader in incarceration rates for more than four decades and continues to populate prisons with more inmates each year. As sentencing laws have become harsher and more extensive, the prison population has reached unprecedented heights with no foresight of future decline. The rise in incarceration is accompanied with rising costs, resulting in higher budget allocations to correctional systems than to educational programs in many states. Minority and low-income populations have the largest presence amongst the prison population. Becker’s theory of crime emphasizes the rational thought behind committing crimes, and how benefits of committing a crime must outweigh the cost for an individual to engage in criminal behavior. According to this theory, it is impossible for crime to be eradicated. The purpose of this research is to investigate fluctuations in incarceration rates when factors like correctional budget, demographic location, and prevalence of police agencies are considered. Data for this thesis was collected from the NLSY, USSC, and the US Census Bureau and employs OLS methodology to estimate the parameters. This study allows for better understanding of factors contributing to the intersection between sex, race, and state population size in terms of incarceration.