If you’ve read our blog before, you might already know that we like to talk about marginal costs. A lot. That’s because marginal costs are the costs that matter to budget and policy staff. Cost-benefit studies that use marginal costs more accurately reflect the potential budget changes a program or policy may bring about.
This recent headline in The New York Times probably made readers wince: “City’s Annual Cost Per Inmate Is $168,000, Study Finds.” The article cited a study by the Independent Budget Office (IBO) that found the annual cost per inmate in New York City in fiscal year 2012 was, on average, $167,731.
When U.S. Attorney General Eric H. Holder Jr. spoke to the American Bar Association earlier this month about a range of criminal justice issues, it was his announcement of a change in policies for charging low-level drug offenders that made headlines. As The New York Times explained, Holder has instructed federal prosecutors not to write the specific quantity of drugs involved when drafting indictments for nonviolent drug defendants who have neither a criminal history nor a significant tie to a cartel or large-scale gang.
The costs and benefits of criminal justice policies affect us all—taxpayers, elected officials, practitioners, and society as a whole. As cost-benefit analysts and budget officials know, any meaningful discussion about government costs requires an understanding of marginal costs because these are the costs affected by policy changes.
Because little concrete information is available about how to calculate marginal costs for cost-benefit analyses (CBA) of justice policies or programs, CBKB has published A Guide to Calculating Justice-System Marginal Costs.
This spring CBKB will publish A Guide to Calculating Justice-System Marginal Costs. Primarily a “how-to” technical guide for analysts, the publication is also intended to inform policymakers who have an interest in the costs and benefits of criminal justice initiatives. (Note: We published the guide in May.)
This won’t be the first time CBKB has addressed marginal costs.
Tracey Kyckelhahn is a statistician with the Bureau of Justice Statistics (BJS), part of the Office of Justice Programs in the U.S. Department of Justice. She is the author of the report State Corrections Expenditures, 1982-2010, which was published in December. We asked Kyckelhahn about BJS’s sources for justice system costs and some challenges associated with collecting and analyzing them.
If you have been following CBKB and reading our blog, you know that we recently hosted a webinar called “Making Sense of the Bottom Line: A Guide to Reading Cost-Benefit Reports.” We also created this two-page handout, which summarizes the webinar and explains what to look for in a justice-related cost-benefit analysis (CBA).
Some interesting studies involving cost-benefit analysis (CBA) and criminal justice are on the horizon. Here are a few reports to look out for in the coming months.
50-state scan of CBA and policymaking: Results First, a project of the Pew Center on the States, will release a study this summer that examines which state governments are conducting cost-benefit analyses and how they are using the results to inform policy and budget decisions.