Part 2, Cost-Benefit Analysis for Justice Policy: A Step-By-Step Guide, PowerPoint Presentation

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Part 2, Cost-Benefit Analysis for Justice Policy: A Step-By-Step Guide, PowerPoint Presentation

  1. 1. Cost-Benefit Analysis for JusticePolicy: A Step-By-Step GuideJanuary 25, 2011Mike Wilson, Oregon Criminal Justice CommissionLora Krsulich, Vera Institute of Justice Slide 1
  2. 2. Cost-Benefit Analysis for Justice Policy:A Step-by-Step GuideJanuary 25, 2011Michael Wilson Lora KrsulichOregon Criminal Justice Commission Vera Institute of Justice Slide 2
  3. 3. The Cost-Benefit Knowledge Bank for Criminal Justice(CBKB) is a project of the Vera Institute of Justicefunded by the U.S. Department of Justice’s Bureau ofJustice Assistance. •Website (cbkb.org) •CBA toolkit •Snapshots of CBA literature •Podcasts, videocasts, and webinars •Roundtable discussions •Community of practice Slide 3
  4. 4. Today’s AgendaIntroduction and Housekeeping 5 minutesReview Data Tables 5 minutesCalculate the Cost of an Offense 15 minutes(Example 1)Apply Cost-Benefit Analysis to 20 minutesOregon State Drug Courts(Example 2)Question and Answer 10 minutesWrap-Up 5 minutes Slide 4
  5. 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 5
  6. 6. Housekeeping items (continued)Webinar support and troubleshooting  Call: (800) 843-9166  E-mail: help@readytalk.comHandoutThis webinar is being recorded. Slide 6
  7. 7. Series PreviewYou 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 7
  8. 8. Part 1 RecapDiscussed prison economics and return on investment from incarcerationDeconstructed costs into their component parts: estimates, probabilities, and sentencing distributionsInterpreted an effect size and demonstrated how effects sizes are used to produce CBA findings Slide 8
  9. 9. Part 2 PreviewYou 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 9
  10. 10. Review Data Tables Slide 10
  11. 11. Table 1: Oregon Cost EstimatesCosts bycrime typeCosts byresourceuseTaxpayerand victimcosts Slide 11
  12. 12. Figure 1: Probability of Arrest, Conviction andIncarceration OffenseUnreported Offenses Reported Offenses No Arrest Arrest No Conviction Conviction Department of Local Jail Probation Corrections Post-Prison Supervision Slide 12
  13. 13. Table 2: Estimated Probability of Arrest andConviction Probability Probability Probability Probability offense offense offense arrest reported leads to leads to leads to arrest conviction conviction Slide 13
  14. 14. Table 3: Sentencing Distribution Probability Probability Probability Average conviction conviction conviction length of leads to leads to jail leads to sentence prison probation Slide 14
  15. 15. Questions?Please raise yourhand. If themoderator calls onyou, press *7 onyour phone toun-mute your line. Slide 15
  16. 16. Example 1:Calculating the Costof an Offense Slide 16
  17. 17. Example 1What is the estimated cost of an assault? Victimization $_______ Arrest $_______ Conviction $_______ Adult Corrections $_______ Jail $_______ Probation $_______ Post-Prison $_______ Supervision Slide 17
  18. 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 18
  19. 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 19
  20. 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 20
  21. 21. What is the estimated cost of an assault? Adult Corrections: Number of convictions per 0.15 Table 2 offense Probability of adult corrections 0.35 Table 3 given conviction for assault 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 21
  22. 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 46.87 months Table 3 sentence (4 years) Discount rate 3 percent Common practice Slide 22
  23. 23. 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 23
  24. 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 0.35 Table 3 conviction for assault 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 24
  25. 25. What is the estimated cost of an assault?Use the same formula from prison costs tocalculate the costs for jail, probation, andpost-prison supervision: Number of convictions Probability of resource use Present value of costs Slide 25
  26. 26. Example 1What 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 Slide 26
  27. 27. The cost of an assault and other typesof crimeThe cost of one assault is $25,688.It is possible to calculate the cost of multipleoffenses.It is also possible to change the unit measuredto calculate the cost of fewer arrests,convictions, inmates, parolees, or probationers. Slide 27
  28. 28. Questions?Please raise yourhand. If themoderator calls onyou, press *7 onyour phone toun-mute your line. Slide 28
  29. 29. Example 2:Applying cost-benefit analysisto Oregon drug courts Slide 29
  30. 30. Example 2: Oregon Drug CourtsAre Oregon’s drug courts cost-beneficial for100 drug court participants?  Determine the impact of the initiative.  Determine whose perspective(s) matter.  Measure costs.  Measure benefits (in dollars).  Compare costs and benefits. Slide 30
  31. 31. Determine the impact of the initiative.Do we have an evaluation of drug courts inour state?  No, but WSIPP meta-analysis estimates a crime reduction of about 12% based on 57 studies. Slide 31
  32. 32. 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 32
  33. 33. Determine whose perspectives matter.State, federal, and local fundingTotal costs or compared to alternative? Slide 33
  34. 34. Measure costs.What we know in Oregon:  How much state funding goes to drug courts  How many participants  Can estimate state dollars per participantDon’t know how much local fundingDon’t know how much “business as usual” costs Slide 34
  35. 35. Measure benefits (in dollars).Need to be clear on what benefits are beingmeasuredTax benefits are a mixture of state and localbenefitsFor Oregon drug court model, most benefitswere “costs avoided” (both taxpayer and victim ) Slide 35
  36. 36. Table 4: Recidivism of Drug Court andProperty Probationers Convicted in 1997 Slide 36
  37. 37. Table 5: Conviction Distribution for 100 Drug orProperty Probationers, 1997 Slide 37
  38. 38. Table 6: Estimated Convictions Avoided for 100Drug Court Participants Slide 38
  39. 39. 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) Slide 39
  40. 40. Table 7: Cost of an Adult Felony Conviction Slide 40
  41. 41. Table 7: Cost of an Adult Felony ConvictionTable 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. Slide 41
  42. 42. Table 8: Estimated Taxpayer Benefit for 100Drug Court Participants Slide 42
  43. 43. Table 9: Estimated Crime Victim Benefit for 100Drug Court Participants Slide 43
  44. 44. Compare costs and benefits.Total costs: $2,000 to $4,000 per participantTotal benefits: $4,100 per participantFor 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 44
  45. 45. Questions? Mike Wilson SAC Director/EconomistOregon Criminal Justice Commission Michael.K.Wilson@state.or.us (503) 378-4850 Slide 45
  46. 46. Wrap-Up Slide 46
  47. 47. Part 2 ReviewCalculated the cost of an offense using realnumbers from OregonBuilt a cost-benefit analysis of an Oregon drugcourtDemonstrated how cost-benefit analysis can beused in decision making Slide 47
  48. 48. Series ReviewLearned 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 48
  49. 49. Follow-upPlease 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 49
  50. 50. Contact InformationLora Krsulichlkrsulich@vera.org(917) 453-0931cbkb@cbkb.orghttp://www.cbkb.org Slide 50
  51. 51. This project is supported by Grant No. 2009-MU-BX K029 awarded by theBureau of Justice Assistance. The Bureau of Justice Assistance is acomponent of the Office of Justice Programs, which also includes theBureau of Justice Statistics, the National Institute of Justice, the Office ofJuvenile Justice and Delinquency Prevention, and the Office of SexOffender Sentencing, Monitoring, Apprehending, Registering, andTracking. Points of view or opinions in this document are those of theauthor and do not represent the official position or policies of the UnitedStates Department of Justice. Slide 51
  52. 52. Thank you! Slide 52

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