part 2, cost-benefit analysis for justice policy: a step-by-step guide, powerpoint presentation

Slide 1

Cost-Benefit Analysis for Justice

Policy: A Step-By-Step Guide

January 25, 2011

Mike Wilson, Oregon Criminal Justice Commission

Lora Krsulich, Vera Institute of Justice

Slide 2

January 25, 2011

Michael Wilson

Oregon Criminal Justice Commission

Cost-Benefit Analysis for Justice Policy:

A Step-by-Step Guide

Lora Krsulich

Vera Institute of Justice

Slide 3

The Cost-Benefit Knowledge Bank for Criminal Justice

(CBKB) is a project of the Vera Institute of Justice

funded by the U.S. Department of Justice’s Bureau of

Justice Assistance.

•Website (cbkb.org)

•CBA toolkit

•Snapshots of CBA literature

•Podcasts, videocasts, and webinars

•Roundtable discussions

•Community of practice

Slide 4

Today’s Agenda

Introduction and Housekeeping 5 minutes

Review Data Tables 5 minutes

Calculate the Cost of an Offense

(Example 1)

15 minutes

Apply Cost-Benefit Analysis to

Oregon State Drug Courts

(Example 2)

20 minutes

Question and Answer 10 minutes

Wrap-Up 5 minutes

Slide 5

Housekeeping items

Questions

Use the chat feature to send us

questions during the webinar.

Raise your hand to ask a question

during a question and answer period. I

will call on you and give you

instructions for how to un-mute your

phone line.

Slide 6

Housekeeping items (continued)

Webinar support and troubleshooting

Call: (800) 843-9166

E-mail: help@readytalk.com

Handout

This webinar is being recorded.

Slide 7

Series Preview

You will learn how to:

Assess your state’s return on investment

from criminal justice expenditures

Explain the costs of crime and benefits

from crime avoided

Consume and produce high-quality

cost-benefit analysis

Slide 8

Part 1 Recap

Discussed prison economics and return on

investment from incarceration

Deconstructed costs into their component parts:

estimates, probabilities, and sentencing

distributions

Interpreted an effect size and demonstrated how

effects sizes are used to produce CBA findings

Slide 9

Part 2 Preview

You will learn how to:

Calculate the cost of an offense using

real numbers from Oregon

Build a cost-benefit model

Use cost-benefit analysis in

decision making

Slide 10

Review Data Tables

Slide 11

Table 1: Oregon Cost Estimates

Costs by

crime type

Taxpayer

and victim

costs

Costs by

resource

use

Slide 12

Figure 1: Probability of Arrest, Conviction and Incarceration

Offense

Unreported Offenses

Reported Offenses

No Arrest

Arrest

No Conviction

Conviction

Local Jail

Probation

Department of Corrections

Post-Prison Supervision

Slide 13

Table 2: Estimated Probability of Arrest and Conviction

Probability

offense

reported

Probability

offense

leads to

arrest

Probability

offense

leads to

conviction

Probability

arrest

leads to

conviction

Slide 14

Table 3: Sentencing Distribution

Probability

conviction

leads to

prison

Probability

conviction

leads to jail

Probability

conviction

leads to

probation

Average

length of

sentence

Slide 15

Questions? Please raise your

hand. If the

moderator calls on

you, press *7 on

your phone to

un-mute your line.

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Example 1: Calculating the Cost

of an Offense

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Example 1

What is the estimated cost of an assault?

Victimization $_______

Arrest $_______

Conviction $_______

Adult Corrections $_______

Jail $_______

Probation $_______

Post-Prison

Supervision

$_______

Slide 18

What is the estimated cost of an assault?

Victimization:

Out-of-pocket victim costs $7,921 Table 1

Quality-of-life victim costs $12,232 Table 1

Total cost $20,153

Add out-of-pocket costs and quality-of-life

costs.

Slide 19

What is the estimated cost of an assault?

Arrest:

Cost of arrest $670 Table 1

Probability of arrest 0.32 Table 2

Total cost $214

Multiply cost of an arrest by probability of

arrest.

Slide 20

What is the estimated cost of an assault?

Conviction:

Cost of conviction $4,877 Table 1

Probability of conviction 0.15 Table 2

Total cost $732

Multiply cost of a conviction by probability

of conviction.

Slide 21

What is the estimated cost of an assault?

Adult Corrections:

Number of convictions per

offense

0.15 Table 2

Probability of adult corrections

given conviction for assault

0.35 Table 3

Present value of prison costs Must

calculate

Total cost

Multiply number of convictions per

offense by probability of adult corrections

and present value of prison costs.

Slide 22

What is the estimated cost of an assault?

Present value of adult corrections costs:

Unit of measurement Measure Source

Cost per year $13,851 Table 1

Average length of

sentence

46.87 months

(4 years)

Table 3

Discount rate 3 percent Common

practice

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What is the estimated cost of an assault?

Present value of adult corrections costs:

Cost of Year 1 $13,851/(1+0.03)

Cost of Year 2 $13,851/(1+0.03)^2

Cost of Year 3 $13,851/(1+0.03)^3

Cost of Year 4 $13,851/(1+0.03)^4

Total present value $51,485

Add cost per year of imprisonment and

incorporate time value of money.

Slide 24

What is the estimated cost of an assault?

Adult Corrections:

Number of convictions per offense 0.15 Table 2

Probability of adult corrections given

conviction for assault

0.35 Table 3

Present value of prison costs $51,485 See previous

slide.

Total cost $2,703

Multiply number of convictions per

offense by probability of adult corrections

and present value of prison costs.

Slide 25

What is the estimated cost of an assault?

Use the same formula from prison costs to

calculate the costs for jail, probation, and

post-prison supervision:

Number of convictions

Probability of resource use

Present value of costs

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Example 1

What is the estimated cost of an assault?

Victimization $20,153

Arrest $214

Conviction $732

Adult Corrections $2,703

Jail $560

Probation $773

Post-Prison Supervision $553

Total cost $25,688

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The cost of an assault and other types of crime

The cost of one assault is $25,688.

It is possible to calculate the cost of multiple

offenses.

It is also possible to change the unit measured

to calculate the cost of fewer arrests,

convictions, inmates, parolees, or probationers.

Slide 28

Questions? Please raise your

hand. If the

moderator calls on

you, press *7 on

your phone to

un-mute your line.

Slide 29

Example 2: Applying cost-benefit analysis

to Oregon drug courts

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Example 2: Oregon Drug Courts

Are Oregon’s drug courts cost-beneficial for 100 drug court participants?

Determine the impact of the initiative.

Determine whose perspective(s) matter.

Measure costs.

Measure benefits (in dollars).

Compare costs and benefits.

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Determine the impact of the initiative.

Do we have an evaluation of drug courts in

our state?

No, but WSIPP meta-analysis estimates a

crime reduction of about 12% based on 57

studies.

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Determine the impact of the initiative.

Other considerations:

Does the effectiveness of the program go

down over time?

Decay rate

What crimes does the program apply to?

How many years out does the program

measure recidivism?

Slide 33

Determine whose perspectives matter.

State, federal, and local funding

Total costs or compared to alternative?

Slide 34

Measure costs.

What we know in Oregon:

How much state funding goes to drug

courts

How many participants

Can estimate state dollars per participant

Don’t know how much local funding

Don’t know how much “business as usual” costs

Slide 35

Measure benefits (in dollars).

Need to be clear on what benefits are being measured

Tax benefits are a mixture of state and local benefits

For Oregon drug court model, most benefits were “costs avoided” (both taxpayer and victim )

Slide 36

Table 4: Recidivism of Drug Court and Property Probationers Convicted in 1997

Slide 37

Table 5: Conviction Distribution for 100 Drug or Property Probationers, 1997

Slide 38

Table 6: Estimated Convictions Avoided for 100 Drug Court Participants

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Measure benefits (in dollars).

Taxpayer benefits (avoided costs):

Costs per felony conviction

Average number of convictions per 100

participants (Table 6)

Victimization benefits (avoided costs):

Costs per felony conviction

Average number of convictions per 100

participants (Table 6)

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Table 7: Cost of an Adult Felony Conviction

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Table 7: Cost of an Adult Felony Conviction

Table 7 changes the unit measured from the cost of an offense (as in Example 1) to cost of conviction.

To calculate cost of conviction, must use cost estimates (Table 1) and probabilities (Table 2).

Number of convictions averted is most common outcome measured in drug court evaluations.

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Table 8: Estimated Taxpayer Benefit for 100 Drug Court Participants

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Table 9: Estimated Crime Victim Benefit for 100 Drug Court Participants

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Compare costs and benefits.

Total costs: $2,000 to $4,000 per participant

Total benefits: $4,100 per participant

For every dollar invested, we avoid $2.05 to $1.02 in costs.

Oregon decided to continue to fund drug courts, in part because of the vast amount of research on effectiveness of drug courts.

Slide 45

Questions?

Mike Wilson

SAC Director/Economist

Oregon Criminal Justice Commission

Michael.K.Wilson@state.or.us

(503) 378-4850

Slide 46

Wrap-Up

Slide 47

Part 2 Review

Calculated the cost of an offense using real

numbers from Oregon

Built a cost-benefit analysis of an Oregon drug

court

Demonstrated how cost-benefit analysis can be

used in decision making

Slide 48

Series Review

Learned how to:

Assess your state’s return on investment

from criminal justice expenditures

Explain the costs of crime and benefits

from crime avoided

Consume and produce high-quality

cost-benefit analysis

Slide 49

Follow-up

Please complete the evaluation form as you leave this training.

To receive information and notifications about upcoming webinars and other events:

• Visit the Cost-Benefit Knowledge Bank for Criminal Justice at http://www.cbkb.org.

• Follow us on Twitter at http://www.twitter.com/CBKBank.

Slide 50

Contact Information

Lora Krsulich

lkrsulich@vera.org

(917) 453-0931

cbkb@cbkb.org

http://www.cbkb.org

Slide 51

This project is supported by Grant No. 2009-MU-BX K029 awarded by the

Bureau of Justice Assistance. The Bureau of Justice Assistance is a

component of the Office of Justice Programs, which also includes the

Bureau of Justice Statistics, the National Institute of Justice, the Office of

Juvenile Justice and Delinquency Prevention, and the Office of Sex

Offender Sentencing, Monitoring, Apprehending, Registering, and

Tracking. Points of view or opinions in this document are those of the

author and do not represent the official position or policies of the United

States Department of Justice.

Slide 52

Thank you!