Informing Criminal Justice Policy andPractice through Cost-Benefit AnalysisTina Chiu | Director of Technical AssistanceValerie Levshin | Policy Analyst, Cost-Benefit Analysis UnitAugust 3, 2010
Vera Institute of JusticeMaking justice systems fairer and moreeffective through research and innovation • Independent, nonprofit organization • Technical assistance, research and demonstration projects • Criminal and juvenile 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 (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?
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
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
CBA in 5 steps1) Evaluate the program2) Consider the perspective3) Measure costs4) Measure benefits – in dollars5) Compare costs and benefits
Example: an employment program for theformerly incarceratedCosts 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?
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
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
Monetizing benefits: victims • Tangible cost of crime to victims • Intangible xnumber of crimes the program prevents = savings to victims
Monetizing benefits: employment Income tax + Labor output =benefit to taxpayers from employment gains
Monetizing benefits: otherMonetizing benefits to participants,communities, and society can be difficult • Need reliable evidence • Need to limit assumptions
Other economic assessmentsCost-Effectiveness Analysis • How do the outcomes compare to the costs?Cost-Analysis • How much does the thing cost? • Which option costs less?
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
ResourcesJustice Research and Statistics Association • CBA workshop, October 26 in Portland, MEWashington 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 ResourcesUrban Institute • Crime and Justice CBA studies • District of Columbia Crime Policy Institute, in partnership with The Brookings InstitutionSociety 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 email@example.com (212) 376-3038• Valerie Levshin firstname.lastname@example.org (212) 376-3062• http://www.vera.org/cba