References

This page contains further detail on the large number of references on which this project builds.

Cost of Crime

Description

There are several main methods used to estimate the costs of crime, of which I focus on the two most prominent: the bottom-up and the top-down approaches. Research using the bottom-up approach attempts to list all the ways in which crime can inflict costs on society; then, it estimates each of these costs and aggregates them. The other main approach goes by several different names: top-down, willingness-to-pay, or contingent valuation. Rather than aggregating up various costs, research using this method relies on surveys of individuals that ask a series of questions aimed at determining the total amount a reduction in crime would be worth.

References

  1. Cohen (1988)
    Uses a variety of data sources to estimate medical costs and lost wages and adds “pain and suffering” costs by comparing the distribution of injuries with jury awards in personal injury cases.
  2. Miller, Cohen and Wiersema (1996)
    Examines jury awards in cases of crime with the assumption that juries are making awards of the amounts that individuals would be “willing to accept” to offset the crime.
  3. Cohen, Miller and Rossman (1994)
    Includes criminal justice costs.
  4. Cohen, et al. (2004)
    Uses contingent valuation methodology, which asks survey respondents questions such as “Would you be willing to pay an extra $200 to reduce the likelihood of burglary by 10%?”
  5. Roman (2012)
    Uses a similar approach to Miller, Cohen and Wiersema’s (1996) bottom-up approach to calculating crime cost, but makes use of a substantially more detailed data set of jury awards.
  6. Ludwig and Cook (2001)
    Focuses on contingent valuation to avoid gun violence.
  7. Cohen, Rust, Steen & Todd (2004)
  8. Cohen (2009)
  9. Cohen and Piquero (2009)
    Examines how costs vary by age of offender for a group of repeat-offenders.

Cost of Prison

Description

Prison costs include costs of feeding, housing, and monitoring prisoners, healthcare costs and capital costs. The largest component of prison costs (over two-thirds) is spent on employee compensation. Twenty-six percent of costs go to prisoner living expenses, with medical care accounting for just under half of that component. Utilities, housing, and food make up the rest (with food accounting for just four percent of overall prison expenditures). Capital expenditures also account for only four percent of the prison expenditures.

References

  1. Vera Institute of Justice (2012)
    Uses state budget data and divides it by the prison population and finds an average annual cost per inmate of $31,360 (in 2010 dollars).
  2. Pew Center on the States (2008)
    Uses state budget data and divides it by the prison population and finds an average annual cost per inmate of $31,537 (in 2008 dollars).

General Deterrence

Description

Incarceration (and other penalties) can reduce crime simply by its threatened use. This effect is called general deterrence, and it has the advantage of potentially reducing crime without increasing costs at all (or even reducing them) – because crime reduction due to longer sentences is concomitant with a reduction (although increase in duration) of incarcerated individuals. The papers referenced below generally find a non-zero, but relatively small general deterrent effect.

References

  1. Lee and McCrary (2009)
    Uses regression discontinuity to find a drop in crime of 2% around the age of majority.
  2. Levitt (1998b)
    Uses cross-state differences in the relative harshness of adult sanctions versus juvenile sanctions and finds that those states with larger jumps in punishment have larger decreases in adult crime relative to juvenile.
  3. Kessler and Levitt (1999)
    Uses a difference-in-difference approach on a change in sentence lengths in California and finds the mean three year deterrent effect to be eight percent.
  4. Marvell and Moody (1995)
    Uses a dataset on firearm sentencing enhancements, prison population, and crimes and finds little evidence for impact of firearm enhancements on deterrence.
  5. Abrams (2012a)
    Uses add-on gun laws as natural experiments and finds that gun robbery rates decline after add-on gun laws go into effect.

Specific Deterrence

Description

While general deterrence operates on the general public through the threat of sanction, specific deterrence acts on the individual offender who has already received a punishment. The relationship between time served and recidivism could be positive or negative. Incarceration could have a rehabilitative effect, which would lead to a negative relationship, or a criminogenic one, which would result in a positive one. Most likely is that both effects are present and either may dominate for different individuals or different sentence lengths. Any empirical study will only detect the net effect, it cannot distinguish the positive and negative components.

References

  1. Nagin, Cullen & Jonson (2009)
  2. Bushway & Paternoster (2009)
  3. Kuziemko (2007)
    Uses a natural experiment that led to the release of 901 prisoners in 1981 and finds a three percent decline in recidivism for every extra month served.
  4. Bushway and Owens (2010)
    Uses 2001 law change in Maryland that provides a natural experiment whereby a natural reference for sentence length is changed and finds that shorter sentences relative to a reference point lead to higher recidivism rates.
  5. Abrams (2012b)
    Uses the randomly-assigned public defender as an instrumental variable for sentence length and finds a generally negative but nonlinear relationship between recidivism and sentence length where longer sentences may reduce recidivism for short sentence lengths but the effects rapidly peter out.
  6. Turner (2009)
    Uses random assignment to attorney and heterogeneity in attorney performance as instrument for sentence length and finds a mostly insignificant relationship between sentence length and recidivism, although one that varies somewhat by the recidivism window.
  7. Loeffler (2005)
    Uses judge-specific sentencing tendencies and random case assignment to obtain exogenous variation in sentence length and finds that incarceration substantially reduces the likelihood of recidivism.
  8. Berube and Green (2007)
    Uses data from the DC superior court and finds little relationship between sentence length and recidivism.
  9. Green and Winik (2010)
    Uses data from the DC superior court and finds a negative and statistically significant relationship between incarceration length and recidivism when doing ordinary least squares regressions, but the sign becomes positive and the effect statistically insignificant when IV estimation is performed.
  10. Berecochea and Jaman (1981)
    Uses randomized 6-month early release among felons serving time in 1970 and finds that the early release group recidivated at a significantly higher rate.

Incapacitation

Description

While the deterrence effects discussed so far focus on how the threat or experience of incarceration modify current or future commission of crime, incapacitation measures a much more direct effect: the current reduction in crime due to removing inmates from society.

References

  1. Levitt (1998)
    Compares the impact of arrest rates on crime rates for one crime with crime rates for other crimes and finds that an additional person-year of incapacitation reduces prevents 5.1 to 8.2 index crimes.
  2. Reuter and Bushway (2007)
  3. Piquero and Blumstein (2007)
    Surveys much of the recent literature.
  4. Bhati (2007)
    Uses a structural model of the offending process and finds an average of 8.5 are averted per year of incarceration.
  5. Owens (2009)
    Uses a natural experiment where a 2001 law change in Maryland reduced sentences for young offenders with juvenile records and finds an incapacitation effect of about 1.5 crimes per year.
  6. Johnson and Raphael (2011)
    Uses the fact that incarceration rates adjust to permanent shocks with a dynamic lag and finds elasticities of between -0.06 and -0.11 for violent crime and between -0.15 and -0.21 for property crime.

Value of Freedom

Description

When offenders are incarcerated, they are restricted from performing work that could be beneficial both to themselves and to society. They also lose a number of other opportunities afforded to those who are free, including the right to spend time with loved ones and friends, to eat what they please, to engage in preferred activities, and to go where they would like.

Some commentators believe that inmates lost freedom should not be incorporated into any sort of cost-benefit or welfare analysis. Foregone wages may be included since they could give an estimate of societal and not just offender loss due to gains from employment. Whether to include the impact on families and friends is also a difficult question.

References

  1. Abrams and Rohlfs (2011)
    Uses the random variation in bail amounts induced by the Philadelphia Bail Experiment to estimate a willingness-to-pay for freedom for defendants and estimates the value of freedom at approximately $1,000 for 90 days of freedom and $6,800 for 90 days for less serious offenders.

Other Costs of Incarceration

Description

Incarcerating offenders will lower necessary spending on other criminal justice costs, including those for policing, courts, and probation officers. I account for these costs by assuming that a large fraction of offenders would otherwise be on probation if they were not incarcerated and that these costs would be of similar magnitude.

A large number of inmates would likely impose costs on the state through welfare, foodstamps, and other social benefits if they were free. Thus this may be seen as a net savings. At the same time, detention facilities must provide medical and mental health care to their wards. These costs are included in the costs of prisons, so it is likely that on net there is no appreciable cost-benefit effect from social benefits.

One concern often raised about incarceration is its impact on long-term employment prospects. A forward-looking offender should incorporate this into the value of freedom. Diminished job opportunities may also result in higher recidivism rates, which are reflected in a lower specific deterrence estimate.

Rehabilitation is a goal of incarceration that is sometimes put forth. While I do not attempt to quantify rehabilitation in moral dimensions, the economic effects may be quantified in terms of increased job prospects and decreased criminality. As mentioned above, any change in offending behavior due to incarceration will be incorporated into the specific deterrence estimates.

Much has been written about the long-term societal consequences of mass incarceration. These are perhaps the most difficult elements to quantify, and include such phenomena as the promotion of racial stigma, poverty, absent parents, loss of economic mobility, distorted marriage markets for Black women, detrimental effects on children, and increases in juvenile crime. These large-scale, societal harms are certainly of a magnitude that they would significantly impact a cost-benefit analysis. However , in this article I confine myself only to the consideration of policy changes with relatively short-term impacts on incarceration. Because the policy changes discussed in this article do not result in the abolition of the large-scale use of incarceration in society, I assume that these long-term effects will remain relatively unchanged.

An additional cost that has not been included thus far is the dead-weight loss of taxation. This is simply the notion that since taxes distort choices (for example, an individual will work less than she would otherwise if she must pay income tax) they impose a social cost. Since incarceration is paid for out of tax revenue, these costs should be adjusted upward to account for the deadweight loss. Estimates for appropriate adjustment factors range from 25% upward. Some cost-benefit analyses incorporate this cost, while others do not. I leave it out of the current calculation, but it can be easily added in.