NCJ Number
202359
Date Published
May 2002
Length
16 pages
Annotation
This document focuses on how formal cost-benefit analysis can help people make informed decisions about certain aspects of the criminal justice system.
Abstract
Cost-benefit information can assist decisionmakers in more efficiently allocating scarce public resources among competing demands. Cost-benefit analysis starts with the results of a program evaluation, and then quantifies the dollar value of the benefits of reduced crime, subtracts the program costs of the drug court, and arrives at a “bottom line” economic estimate for the program. In theory, a cost-benefit analysis of a criminal justice program should involved five straightforward steps. The first step is to add up the monetary benefits. This step involves asking who the benefits are for, what the dollar value of reduced crime is, what are the non-crime-related benefits, what about the long run, and what are the marginal costs. The second step is subtracting the costs. This step involves estimating what the programs cost to run. The two types of costs associated with programs are capital costs and operating costs. The third step is to see if the resulting bottom line, expressed in dollar terms, is positive or negative. The result of these calculations is the bottom-line economic estimate that one looks for in a cost-benefit analysis. The fourth step is to compare the estimated bottom line to the returns available from other options. The cost-benefit analysis should compare one program to another, rather than solely focusing on the absolute value of a particular benefit-to-cost ratio. The final step is to test the riskiness of the conclusions. A real-world example that illustrates some of the benefits of this cost-benefit analysis is the State of Washington in adopting a strategy to implement cost-beneficial programs for juvenile offenders. This example indicates that cost-benefit analysis can be used to help select reasonable courses of action based on a rational consideration of research-based evidence. A well-done program evaluation coupled with cost-benefit analysis can be used to help evaluate economic consequences of program choices. A cost-benefit analysis can be used to help direct State resources toward economically successful juvenile justice programs.