As discussed briefly in Chapter 1, there are several reasons why criminal justice policymakers might be interested in quantifying the cost of crime. Thus policymakers might be interested in how crime compares to other social ills or whether the burden of crime on society is increasing or decreasing over time. One of the most important-and most controversial-purposes of placing dollar values on crime is to conduct a benefit-cost analysis.
Since the early 1980s, federal government regulatory agencies have been required to conduct benefit-cost analyses on major regulatory initiatives. These requirements have been adopted through Executive Order and implemented by the Office of Management and Budget. 1 Recent proposals in Congress would legislatively mandate similar requirements. 2 Thus benefit- cost analyses have become a routine tool in the development of environmental, health, and safety regulations. 3 Despite its widespread use elsewhere, benefit-cost analysis has not been a staple of the criminal justice policy analyst's toolkit. This is rapidly changing in response to both increasing public demand for accountability of government agencies and the availability of new data and techniques of analysis for identifying the costs and benefits of criminal justice policies. For example, the U.S. National Institute of Justice recently solicited research proposals in several priority topic areas. Among its priorities were “the studies that develop cost-benefit methods that can be applied to crime prevention or control programs or that assess the cost-effectiveness of specific crime prevention strategies, programs, and technologies” (NIJ, 2004). At the state level, legislatures in Washington, Oregon, Virginia, and others have begun to mandate studies of both “what programs work” and the cost-effectiveness (including weighing the costs and benefits) of criminal justice and crime prevention programs. 4 Ultimately, benefit-cost analyses might be required for newly proposed criminal justice policies.
The existing literature on benefits and costs of criminal justice policies generally takes either one of two forms: “cost-effectiveness” or “benefit-cost” studies. A cost-effectiveness study seeks to answer questions such as “what is the cost per crime averted?” or “what is the cost per successfully treated offender who does not recidivate?” These questions require a thorough