Exploring Costbenefit Analysis of Incarceration: Hawaii Drug Felons

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Exploring Cost-benefit Analysis of
IncarcerationHawaii Drug Felons

• Thomas E. Lengyel, MSW, Ph.D.
• Director, Research Evaluation Services
• Alliance for Children and Families
• Presentation to Vera Institute of Justice
• New York CityDecember 16, 2005

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Structure of Presentation

• Review of cost-benefit analysis
• Hawaiis prison demographics
• Application of cost-benefit analysis to Hawaii
  drug felons

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Review of Cost-benefit Analysis

• Factual Foundations
• Social cost and social benefit
• Elements of social cost
• Elements of social benefit
• Scale of offenses
• Scale of offenders
• Prison as an economic space

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Cost-Benefit AnalysisFactual Foundations (1)

• The majority of prisoners in both state and
  federal prisons are parents with minor children -
  56
• Female prisoners are 6.8 of the total prison
  population men are 93.2
• For state prisoners, 65 of women and 55 of men
  have minor children
• Hawaii may have more parents on average

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Cost-Benefit AnalysisFactual Foundations (2)

• Women prisoners are in worse shape at admission
  than men
• Women with children are worse off than women
  without children
• More drug abuse, alcohol addiction, mental
  illness, homelessness, low educational
  attainment, and poverty
• 10 of mothers children are in foster care 2
  for fathers
• Women prisoners in Hawaii may be worse off than
  their mainland counterparts

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Cost-Benefit AnalysisFactual Foundations (3)

• Women are more expensive to house in prison than
  men
• Expense derives partly from their poorer
  condition on entry and higher need for services
• More mothers (64) than fathers (44) lived with
  their children before admission
• Note This may be an overestimate

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Cost-Benefit AnalysisFactual Foundations (4)

• Where children live during incarceration depends
  on the prisoners gender
• Children of father-prisoners tend to live with
  their mother, and a few with grandparents
• Children of mother-prisoners live primarily with
  grandparents or other relatives
• Women are the primary caregivers when the mother
  is incapacitated other women take her place

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Cost-Benefit AnalysisThe Nature of Social
Benefit

• Two basic parts to the concept
• Deterrence
• Commission of a crime is averted because the
  potential perpetrator fears the consequences
• Effect is largest with property crimes that have
  low social costs
• Incapacitation
• Commission of a crime is averted because the
  potential perpetrator is unable to commit crime
• Benefit is greatest with violent crimes
• Some include retribution/punishment as a benefit

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Cost-Benefit AnalysisThe Concept of Social Cost

• Definition Contextual or downstream costs of a
  course of action (burdens on society)
• Destroyed resources
• Additional needs generated by an action
• Foregone benefits to society that would have been
  experienced had the action not taken place
• Social cost of prison is distinct from lockup
  cost

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Cost-Benefit AnalysisSocial Costs of
Incarceration (1)

• Direct social costs (quantified or quantifiable)
• Opportunity cost of spending on prisons
• Lost productivity of inmates
• Post-release decline in wages
• Pain and suffering (disutility) of prisoners
  their families
• Reduced child care by inmate
• Foster care for placed children
• Additional social, health, educational services,
  child care for children/dependents
• Presentence investigation and assessment
• Post-release supervision (parole)

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Cost-Benefit AnalysisSocial Costs of
Incarceration (2)

• Grey costs (quantifiable research ongoing)
• TANF for dependents caregivers
• Food stamps
• Medicaid/SCHIP
• Housing assistance
• Lost child support from non-custodial parent
• Victim compensation costs
• Economists prefer to call these transfer payments

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Cost-Benefit AnalysisSocial Costs of
Incarceration (3)

• Indirect costs (not currently quantified)
• Trauma to children leading to
• Increased special education, physical and mental
  health services, and other support
• Decreased future productivity
• Increased criminality
• Increased recidivism of released prisoners
• Hidden costs (costs born by others - not
  quantified)
• Family supervision of children
• Family housing of parent children post-release

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Micro-costing of Social CostA Guestimate
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Cost-Benefit AnalysisSocial Costs of
Incarceration (4)

• Bottom Line Preliminary work suggests direct
  social costs are about twice the cost of lockup
• Probably a conservative estimate

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Cost-Benefit AnalysisSocial Benefit of
Incarceration

• Direct social benefit
• Reduced criminal activity from incapacitation
• Incarceration prevents 14.7 additional index
  crimes (Levitt 1996)
• Cost of various index crimes calculable (Levitt
  and Cohen)
• Net savings for adding one median prisoner is
  75,945 in reduced index crime (updated to 2005
  dollars)
• Deterrence
• Value of retribution/punishment

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Cost-Benefit AnalysisSocial Benefit of
Incarceration (2)

• Indirect social benefit
• Reduction in future crimes (deterrence)
• Increase in sense of safety
• Increase in economic activity in safe areas
• Reduction in insurance premiums in safe areas

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Cost-Benefit AnalysisSocial Benefit of
Incarceration (3)

• Most costly index crimes are murder, rape,
  assault, and robbery
• Accounts for about 56,360 of the effect (2005
  dollars)
• Least costly index crimes are burglary, auto
  theft, and larceny
• Each of these crimes costs on average 2745 per
  crime in economic and quality of life costs (2005
  dollars)

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Cost-Benefit AnalysisScale of Offenses

• Assumption An offender will tend to commit the
  same type of offense for which they were
  sentenced
• Offense Scale Offenses can be arranged on a
  scale by the social benefit from their avoidance
• Murder gt Assault gt Burglary gt Drug use
• More benefit lt gt Less Benefit

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Cost-Benefit AnalysisScale of Offenders

• Offender Scale
• Offenders can be arranged on a scale by the net
  cost (lockup social cost) of their
  incarceration
• Women w. Men w. Men w/o
• multiple multiple children
• minor children children
• More cost lt gt Less cost

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Cost-Benefit AnalysisPrison as an Economic Space
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Update Prisoner Census (1)
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Update Prisoner Census (2)
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Prisoner Census Findings

• Hawaiis prison population has increased about
  8 in the past two years
• Women prisoners increased at more than double the
  rate of men - 15.2
• The number of prisoners held on the mainland has
  grown by 42.5
• The proportion of prisoners held on the mainland
  has increased from 22.5 in 2003 to 29.8 today

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Update Prisoner CensusDrug Felons
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Prisoner Census Findings

• Between June 2003 and August 2005 prisoners
  serving sentences for drugs grew by 37.5
• Almost all the growth was for the lower offense
  categories (B and C)
• The most dramatic growth was for women
  incarcerated for Class C offenses 69.1
• Implication Hawaii is experiencing significant
  growth in categories of prisoners with the
  greatest total cost and the smallest social
  benefit

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Cost-Benefit AnalysisDrug Felons in Hawaii

• Net Incarceration Cost Calculation

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Cost-Benefit AnalysisDrug Felons in Hawaii

• Social Benefit Calculation

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Cost-Benefit AnalysisDrug Felons in Hawaii

• Cost-benefit Comparison

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Threshold Analysis

• Threshold values of total cost and social benefit
  per inmate per year

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Cost Comparisons

• Social benefit and social cost of incarcerating
  Hawaii drug felons per average sentence

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Cost-Benefit AnalysisDrug Felons in Hawaii

• Considerable amounts of treatment can be provided
  for these costs
• Hawaiis Department of Health Alcohol and Drug
  Abuse Division reported the average cost of an
  ideal approach to treatment services cost
  3,315 per admission
• Seems low
• At this cost all 712 currently incarcerated drug
  felons could be treated for 2.36 Million
• Substance abuse treatment, depending on
  intensity, would also have incapacitation
  benefits that partially balance its cost

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Drug Felons in HawaiiLessons Learned

• Conclusions
• Its worthwhile to scrutinize classes of
  prisoners
• Numbers and classes of prisoners are determined
  in large part by state policy
• The state has the ability to reduce the prison
  population through policy, legislation, and legal
  practice (e.g., prosecution, sentencing)

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Drug Felons in HawaiiLessons Learned

• Conclusions
• Savings from prisoner reductions should be
  invested in programs that delay or forestall
  incarceration, such as job training, economic
  opportunity, and drug abuse education and
  treatment
• New prisons should be accompanied by a full set
  of services to stem the upward spiral caused by
  recidivism, especially with drug offenders

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Cost-Benefit AnalysisAcknowledgements

• Thanks to
• Ken Hashi, Department of Public Safety
• Amalia Bueno, Department of Public Safety
• Contact information
• Thomas E. Lengyel
• Alliance for Children and Families
• 11700 W. Lake Park Drive
• Milwaukee, WI 53224
• [phone], x. 3637
• tlengyel_at_Alliance1.org