For those without a financial background trying to figure out a program’s cost-benefit projection can be difficult. Vera Institute has issued “A Guide to Calculating Justice-System Marginal Costs” which makes the whole process simpler to understand.
A companion fact sheet to the guide explains “Justice policies and programs generate taxpayer benefits and costs. If you want an accurate picture of those costs and benefits, you need to understand marginal costs. In cost-benefit analysis (CBA), “marginal” does not mean small or insignificant. It means at the margin of an existing level of operations and describes the cost or benefit that will be realized because of changes in output or workload.” Click here to go to website.
Vera adds, “The costs and benefits of criminal justice policies and activities affect everyone. Understanding what goes into the costs of operating jails, prisons, probation and parole, courts, law enforcement agencies, treatment programs, and other segments of the criminal justice system is important for taxpayers, politicians, practitioners, and society as a whole.
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.”