Allocating Resources Among Prisons and Social Programs in the Battle Against Crime
Posted: 2 Aug 1998
Abstract
This paper provides a cost-benefit analysis of prisons and various social spending options as approaches to reducing crime. We find that the elasticity of crime with respect to incarceration is roughly .15, which suggests that substantial increases in prison populations above the very low levels of the early 1980s were justified. However, each successive doubling of the prison population costs twice as much as the last but yields only a further reduction of 15 percent from a declining base. Therefore, additional increases in incarceration are probably not cost-justified.
We consider the tradeoff of future increases in incarceration against higher social spending on very young children. Since social spending is directed to a large population, while incarceration targets only those who are acting badly, social spending is a more costly approach per targeted individual. To achieve cost-effective crime reduction from social spending, therefore, one needs to channel resources to the highest crime individuals. Although such targeting can be politically controversial, it is possible to achieve more crime reduction through very enriched pre-school spending programs if one can target narrowly and if the broadly adopted pre-school programs could achieve about one-half the crime-reducing benefits of the small pilot projects that have been conducted to date.
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