Tina Chiu | Director of Technical Assistance Valerie Levshin | Policy Analyst, Cost-Benefit Analysis Unit August 3, 2010

Informing Criminal Justice Policy and Practice through Cost-Benefit Analysis

Making justice systems fairer and more effective through research and innovation

• Independent, nonprofit organization

• Technical assistance, research and demonstration projects

• Criminal and juvenile justice

Vera Institute of Justice

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

What is Cost-Benefit Analysis?

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?

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

What is cost-benefit analysis (CBA)?

Examine new prison construction

Identify alternatives to incarceration

Evaluate raising the age of juvenile jurisdiction

Assess the cost-effectiveness of IT initiatives

Examples of CBA Application

Conducting a cost-benefit analysis

1) Evaluate the program

2) Consider the perspective

3) Measure costs

4) Measure benefits – in dollars

5) Compare costs and benefits

CBA in 5 steps

Costs Benefits • Job coaching • Support services • Payments to

participants

• Less spending on the justice system (prisons, jails, courts, police)

• Fewer victims

• Higher employment rates

• Healthier and more productive program participants

• Stronger communities

Which side is greater?

Example: an employment program for the formerly incarcerated

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

Monetizing benefits: justice system

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

cost of crime to victims x

number of crimes the program prevents =

savings to victims

• Tangible • Intangible

Monetizing benefits: victims

Income tax +

Labor output =

benefit to taxpayers from employment gains

Monetizing benefits: employment

Monetizing benefits to participants, communities, and society can be difficult

• Need reliable evidence

• Need to limit assumptions

Monetizing benefits: other

Cost-Effectiveness Analysis • How do the outcomes compare to the costs?

Cost-Analysis • How much does the thing cost? • Which option costs less?

Other economic assessments

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

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

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/

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

For more info

• Tina Chiu tchiu@vera.org (212) 376-3038

• Valerie Levshin

vlevshin@vera.org (212) 376-3062

• http://www.vera.org/cba