A Guide to Calculating Justice-System Marginal Costs

"Any economic study of a justice-related investment needs to use the right cost information in its calculations. The type of cost used makes a difference in the accuracy of a study’s findings, as well as its relevance for policymaking, budgeting, and practice. Vera’s Cost-Benefit Analysis Unit has published this guide to help technical users and general readers understand marginal cost-the amount of change in total cost when a unit of output changes." “This guide [in particular] instructs policy analysts how to calculate a particular kind of taxpayer costs called marginal costs for use in CBAs (cost-benefit analyses) of criminal justice programs and policies ... A cost-benefit analysis aims to measure the net benefit to society, but this guide covers only costs to taxpayers and not societal costs of crime, which include fear of crime, avoidance costs, and emotional and physical harm to victims” (p. 4). Sections cover: introduction; what marginal costs are-types of government costs, short-run and long-run marginal costs, and taxpayer benefits versus taxpayer savings; how to calculate marginal costs-methods, and data collection; examples in the justice system-prisons and jails, probation and parole, courts, law enforcement, and programs; recommendations for analysts and justice agencies; resources for methods and data.