The 'Cost of Crime' and Benefit-Cost Analysis of Criminal Justice Policy: Understanding and Improving Upon the State-of-the-Art

42 Pages Posted: 3 Sep 2016  

Mark A. Cohen

Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Law School; Resources for the Future

Date Written: August 31, 2016

Abstract

The use of benefit-cost analyses by criminal justice researchers has slowly been increasing over the past 30 years. While still in its infancy, benefit-cost analyses of criminal justice policies have recently moved from the academic arena to actual use by policy makers. The growing use of benefit-cost analysis in crime policy tends to be lauded by economists; however, criminologists and legal scholars are less than unanimous in their views. A recent issue of Criminology and Public Policy on the “Role of the Cost-of-Crime Literature,” highlights this controversy. Two main themes can be distilled from critiques of the literature: first, the considerable uncertainty that exists in cost and benefit estimates; and second, the fact that important social costs are not being taken into account in current models. A related critique is that current methodologies to estimate the cost of crime are affected by income; bringing with it a concern that criminal justice policies based on a benefit-cost analysis will favor the rich. This research note addresses these broad questions about the role of benefit-cost analysis in the criminal justice policy arena and attempts to clear up some misunderstandings on the methodologies used to estimate the cost of crime. I also highlight some of the most important gaps in the literature for those interested in helping to improve the state-of-the-art in estimating the “cost of crime.” Perhaps equally important, I hope to demystify benefit-cost analysis and unmask it for what it really is – an important tool that can help policy makers systematically and transparently assess and compare options with the goal of making better policy decisions.

Keywords: cost of crime, benefit-cost analysis, criminal justice policy

JEL Classification: D61, K42, H40

Suggested Citation

Cohen, Mark A., The 'Cost of Crime' and Benefit-Cost Analysis of Criminal Justice Policy: Understanding and Improving Upon the State-of-the-Art (August 31, 2016). Available at SSRN: https://ssrn.com/abstract=2832944 or http://dx.doi.org/10.2139/ssrn.2832944

Mark A. Cohen (Contact Author)

Vanderbilt University - Owen Graduate School of Management ( email )

401 21st Avenue South
Nashville, TN 37203
United States
615-322-0533 (Phone)

HOME PAGE: http://www.mba.vanderbilt.edu/faculty/mcohen.cfm

Vanderbilt University - Law School

131 21st Avenue South
Nashville, TN 37203-1181
United States

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States
202-328-5000 (Phone)

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