New to cost-benefit analysis?
CBKB has compiled a variety of resources to help you learn about cost-benefit analysis and its application to criminal justice policy and planning. This page provides a brief definition of cost-benefit analysis (CBA), explains how CBA can inform justice policy, and outlines the steps involved in conducting cost-benefit studies.
After reviewing this basic information, consult our glossary for definitions of common terms used in CBA and other economic assessments, and read through the CBKB toolkit, which provides more detailed information about how to conduct a CBA. Search our reference database to find cost-benefit studies, articles, and papers related to criminal justice policies and programs. And check our podcast, presentation, and webinar collections for resources geared toward both new and advanced cost-benefit practitioners.
What is cost-benefit analysis (CBA)?
CBA is an evaluation technique that compares the costs and benefits of policies and programs over a long-term period. The hallmark of CBA is that both the costs and the benefits are expressed in monetary terms so that costs and benefits can be directly compared. Also, because benefits are always expressed in dollar terms, CBA enables decision makers to compare policies and programs with entirely different purposes and outcomes.
How can CBA inform justice policy?
CBA supplies policymakers with the information to weigh the pros and cons of alternative investments, and enables them to identify options that are not only cost-effective but also have the greatest net social benefit. Cost-benefit analysis can be applied to a broad range of justice issues and help policymakers answer difficult questions, such as:
- What reentry programs provide the greatest return on investment?
- If we need to cut services, which services can we reduce or eliminate without jeopardizing public safety?
- Which mental health treatments deliver the “biggest bang for the buck”?
- Where should we allocate our limited dollars in policing, jails, or pre-trial detention services?
How is a CBA conducted?
CBA involves the following steps:
1. Assess the impact of the initiative.
- Does it work? Does it accomplish the desired end, such as reducing recidivism or substance abuse? If the target initiative cannot be directly evaluated, has a similar initiative been proven to work?
2. Measure the costs of the initiative.
- What does it cost to launch and operate the policy or program?
3. Measure the benefits of the initiative.
- What is the dollar value of the initiative’s impact? Who does the program benefit? Criminal justice initiatives can affect many groups, including taxpayers, victims, and program participants. What is the magnitude of the economic benefits to each relevant group?
4. Compare costs and benefits.
- Over the long term, do the benefits outweigh the costs? Does the initiative deliver higher or lower returns on investment than alternative options?