1. Informing Criminal Justice Policy and
Practice through Cost-Benefit Analysis
Tina Chiu | Director of Technical Assistance
Valerie Levshin | Policy Analyst, Cost-Benefit Analysis Unit
August 3, 2010

2. Vera Institute of Justice
Making justice systems fairer and more
effective through research and innovation
• Independent, nonprofit organization
• Technical assistance, research and
demonstration projects
• Criminal and juvenile justice

3. Cost-Benefit Analysis Unit
• Provides general information and
training on CBA
• Conducts CBA studies
• Advances knowledge and practice
• Connects interested stakeholders
• Helps others develop capacity

4. What is Cost-Benefit Analysis?

5. What is cost-benefit analysis (CBA)?
 A tool that helps determine:
 Is this program cost-effective?
 How much does this program generate
in cost-savings?
 Which program will provide the greatest
value for my money?

6. What is cost-benefit analysis (CBA)?
 Assists policymakers and funders in
identifying cost-effective programs
 Assists service providers in
demonstrating the economic benefit
of their programs

7. Examples of CBA Application
 Examine new prison construction
 Identify alternatives to incarceration
 Evaluate raising the age of juvenile
jurisdiction
 Assess the cost-effectiveness of IT
initiatives

8. Conducting
a cost-benefit analysis

9. CBA in 5 steps
1) Evaluate the program
2) Consider the perspective
3) Measure costs
4) Measure benefits – in dollars
5) Compare costs and benefits

10. Example: an employment program for the
formerly incarcerated
Costs Benefits
• Job coaching • Less spending on the justice
system (prisons, jails, courts,
• Support services
police)
• Payments to
participants • Fewer victims
• Higher employment rates
• Healthier and more productive
program participants
• Stronger communities
Which side is greater?

11. Monetizing benefits: justice system
cost of crime to New York justice
agencies that operate jails, prisons,
police, courts & community supervision
x
number of crimes the program
prevents
=
savings to the justice system

12. Monetizing benefits: justice system
• Marginal costs reflect actual cost-savings
• Magnitude of the marginal costs depends
on the policy’s impact on the system
• Several approaches:
1) Regression analysis
2) Government agencies’ estimates
3) Capacity reductions
4) Budget review

13. Monetizing benefits: victims
• Tangible
cost of crime to victims • Intangible
x
number of crimes the program prevents
=
savings to victims

14. Monetizing benefits: employment
Income tax
+
Labor output
=
benefit to taxpayers from employment
gains

15. Monetizing benefits: other
Monetizing benefits to participants,
communities, and society can be difficult
• Need reliable evidence
• Need to limit assumptions

16. Other economic assessments
Cost-Effectiveness Analysis
• How do the outcomes compare to the costs?
Cost-Analysis
• How much does the thing cost?
• Which option costs less?

17. What can you do to get started?
• Collect data
• Program costs
• Program outcomes
• Identify internal/external analysts
• Financial analysts
• Researchers
• Review the literature
• CBA’s of similar programs

18. Resources
Justice Research and Statistics Association
• CBA workshop, October 26 in Portland, ME
Washington State Institute for Public Policy
• Publications at http://www.wsipp.wa.gov/
Pew Center on the States
• Delivering Results initiative
• Technical assistance to states

19. More Resources
Urban Institute
• Crime and Justice CBA studies
• District of Columbia Crime Policy Institute, in
partnership with The Brookings Institution
Society for Benefit-Cost Analysis
• Evidence and the “NEW” Policy Evaluation
conference, October 18-19 in Washington, D.C.
• Journal of Benefit-Cost Analysis
• http://benefitcostanalysis.org/

20. Cost-Benefit Knowledge Bank
• Funded by the Bureau of Justice Assistance
• Follow us on @CBKBank
• Website
• CBA Toolkit
• Snapshots of CBA Literature
• Roundtable Discussions
• Podcasts, Videocasts, and Webinars
• Community of Practice

21. For more info
• Tina Chiu
tchiu@vera.org
(212) 376-3038
• Valerie Levshin
vlevshin@vera.org
(212) 376-3062
• http://www.vera.org/cba