Slide 1

Cost-Benefit Analysis for Justice Policy: A Step-By-Step Guide

January 18, 2011Mike Wilson, Oregon Criminal Justice CommissionLora Krsulich, Vera Institute of Justice

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January 18, 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 • April 9, 2023

Today’s Agenda

Introduction and Housekeeping 5 minutes

Introduction to CBA in Justice Policy 10 minutes

Prison Economics 5 minutes

Costs of Crime 20 minutes

Estimating Effects 5 minutes

Question and Answer 10 minutes

Wrap Up 5 minutes

Slide 4 • April 9, 2023

Housekeeping items

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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 6 • April 9, 2023

Series Preview

You will learn how to:

Assess your jurisdiction’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 7 • April 9, 2023

Part 1 Preview

You will learn how to:

Discuss prison economics and the return on investment from incarceration.

Deconstruct costs into their component parts: estimates, probabilities and sentencing distributions.

Interpret an effect size and demonstrate how effects sizes are used to produce CBA findings

Slide 8 • April 9, 2023

Introduction to Cost-Benefit Analysis in Justice Policy

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What is cost-benefit analysis?

An approach to policymaking

A systematic tool for evaluating public policy

A way to weigh options

A method for finding out what will achieve the greatest results at the lowest cost

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Why use cost-benefit analysis?

Strengths:

Inform policy

Efficient use of resources

Common measurement

Weaknesses:

Accuracy

Deciding what costs/benefits to include

Slide 11 • April 9, 2023

Cost-benefit applications

Ballot initiative

Program designed to reduce drug use

What benefits do you include?

Which costs are measured? County, state, local, all?

Slide 12 • April 9, 2023

Prison Economics

Slide 13 • April 9, 2023

Prison Economics

What is the impact of incarceration on crime? The Oregon Criminal Justice Commission

found that a 10% increase in the incarceration rate leads to a 2.6% reduction in crime.

Others, including the Washington State Institute of Public Policy (WSIPP), have found similar results.

How many crimes are avoided by incarceration?

What is the cost-benefit ratio of incarceration?

Slide 14 • April 9, 2023

Pie Chart SlideCrimes Avoided by Incarcerating an Additional Offender

0

5

10

15

20

25

30

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Cri

me

s A

vo

ide

d

Source: Oregon Criminal Justice Commission

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Cost-Benefit Analysis of Incarceration

OregonYear All Violent Property Drug1994 $2.78 $9.57 $2.36 $0.371995 $2.42 $8.20 $2.40 $0.371996 $1.98 $7.06 $2.23 $0.341997 $1.81 $6.58 $2.22 $0.361998 $1.60 $5.85 $1.94 $0.361999 $1.31 $5.37 $1.74 $0.322000 $1.10 $5.24 $1.61 $0.312001 $1.11 $4.87 $1.46 $0.282002 $0.95 $4.46 $1.20 $0.262003 $1.01 $4.82 $1.26 $0.292004 $1.01 $4.33 $1.18 $0.322005 $0.93 $4.35 $1.10 $0.352006 $0.96 N/A N/A N/A2007 $0.91 N/A N/A N/A

Cost-Benefit Analysis of IncarcerationWashington

Source: Oregon Criminal Justice Commission and WSIPP

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Costs of CrimeCrime Estimates

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Table 1: Oregon Cost Estimates

Costs by

resource

use

Costs by

crime type

Taxpayer

and victim

costs

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Costs by Crime Type

Murder/manslaughter

Sex offense

Robbery

Assault

Property

Drug

Other

Misdemeanor

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Costs by Resource Use

Arrest, Conviction, and State Adult Costs Marginal vs. average cost Sources of cost data

Cross sectional regression analysisLocal budget dataLocal arrest data and traffic stop data

For state adult costs, must keep track of inflation and put dollars in a common year

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Taxpayer Costs

Police

Courts

Juvenile detention state

Juvenile detention county

Juvenile probation

Juvenile parole

Juvenile county supervision

Adult probation

Adult jail (county)

Adult prison

Adult post prison supervision

Slide 21 • April 9, 2023

Victimization Costs

How can we estimate costs to victims?

Victimization estimates: National Institute of Justice, Victim Costs and

Consequences: A New Look (1996) K. E. McCollister, M. T. French, & H. Fang (2010).

The Cost of Crime to Society: New Crime-Specific Estimates for Policy and Program Evaluation. Drug and Alcohol Dependence, 108(1), 98-109.

Tangible and intangible losses

Loss estimates

Slide 22 • April 9, 2023

Questions?

Slide 23 • April 9, 2023

Costs of CrimeProbabilities

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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

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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

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Probability of an Offense Being Reported

Source: National Victimization Survey (2007) Person crimes: 46% reported Property crimes: 37% reported

Oregon Example

Need to make adjustments to reflect felony crimes in OregonTheft value over $750Sex Crimes against children

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Probability of a Reported Offense Leading to an Arrest

Source: Uniform Crime Reports Offense and arrest data Oregon Example: Arrest Rate

Crime Type Number reported

Number of arrests

Arrest rate

Rape/Other Sex 4,264 962 23%

Assault 6,914 3,851 56%

Motor vehicle theft

11,850 1,294 11%

Slide 28 • April 9, 2023

Probability of an Offense Leading to an Arrest

Oregon Example

For number of actual offenses, divide number reported by national rate of report.

For probability of arrest, divide number of arrests by number of actual offenses.

Crime Type Number Reported

Number of arrests

National rate of report1

Number of actual offenses

Probability of arrest

Rape/Other Sex

4,264 962 31% 13,888 17%

Source: National Victimization Survey, 2007.

Slide 29 • April 9, 2023

Probability of an Arrest Leading to a Conviction

How many arrests end in conviction

Oregon Example

This was difficult to do because OR does not have a map of UCR data to state law codes

Worked with a few large police departments to map UCR to Oregon Revised Statutes

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Questions?

Slide 31 • April 9, 2023

Costs of Crime:Sentencing Distributions

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Sentencing Distributions

Need to know the sentencing distribution to calculate DOC costs

What percentage of convicted offenders get prison, probation and local control?

What are the average lengths of the sentences?

What are the present value costs of incarceration?

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Table 3: Sentencing Distribution

Probability

conviction

leads to prison

Probability

conviction

leads to jail

Probability

conviction

leads to

probation

Average length

of sentence

Slide 34 • April 9, 2023

Questions?

Slide 35 • April 9, 2023

Estimating Effects

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What is an effect size?

Quantifies the effectiveness of a particular policy or program

Estimates how much a program reduces crime

Provides a foundation for cost-benefit analysis

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Where do effect sizes come from?

Evaluations of own-state programs Are there estimates for a given program in

your state?

Meta-analysis Meta-analysis summarizes research to

estimate an effect size

If no effect size available, you can calculate what effect size would be needed to pay for the program

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Advantages of Evaluating Own State Programs

Effect size from the literature will likely not match your state Different time periods Different demographics

Effectiveness changes over time

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Advantages of Meta-Analysis

Program may not exist in your state

Expensive and difficult to evaluate all programs

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Applying an Effect Size

CBA monetizes effect sizes: Program costs Averted taxpayer costs (arrest, conviction,

state adult costs) Averted victim costs (out of pocket and

emotional) Offender, family, community benefits

Slide 41 • April 9, 2023

Example of Cost-Benefit Findings

Programs Change in Crime(# of studies)

Net Total Benefits

Net Taxpayer Benefits

Functional Family Therapy -18.1% (7) $54,067 $17,016

Multisystemic Therapy -7.7% (10) $19,385 $3,715

Multidimensional Treatment Foster Care

-17.9% (3) $96,173 $23,600

Family Integrated Transitions

-10.2% (1) $48,653 $7,232

Teen Courts -14.0% (1) $17,374 $5,465

Source: Charting a New Course: A Blue Print for Transforming Juvenile Justice in New York State , A Report of Governor David Paterson’s Task Force on Transforming Juvenile Justice. (New York: 2009).*Net total benefits and net taxpayer benefits are reported per-person, per lifestyle.

Slide 42 • April 9, 2023

Big picture take-aways

Incarceration reduces crime.

There are diminishing returns to incarceration.

Crime costs are influenced by type of crime and how resources are used to arrest, convict, and sentence offenders.

Using effect sizes, CBA can provide a framework to compare across policy choices.

Slide 43 • April 9, 2023

Questions?

Contact Information:

Mike WilsonSAC Director/Economist

Oregon Criminal Justice CommissionMichael.K.Wilson@state.or.us

(503) 378-4850

Slide 44 • April 9, 2023

Wrap-Up

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Part 1 Review

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 46 • April 9, 2023

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 47 • April 9, 2023

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

The next webinar in this series will take place on Tuesday, January 25 at 2 p.m. EST.

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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 49 • April 9, 2023

Contact Information

Lora Krsulichlkrsulich@vera.org(212) 376-5201

cbkb@cbkb.org

http://www.cbkb.org

Slide 50 • April 9, 2023

Thank you!