Exploring Cost-benefit Analysis of Incarceration: Hawai’i Drug Felons

1. Exploring Cost-benefit Analysis of Incarceration:Hawai’i 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

2. Structure of Presentation • Review of cost-benefit analysis • Hawai’i’s prison demographics • Application of cost-benefit analysis to Hawai’i drug felons

3. 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

4. Cost-Benefit Analysis:Factual 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 • Hawai’i may have more parents on average

5. Cost-Benefit Analysis:Factual 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 Hawai’i may be worse off than their mainland counterparts

6. Cost-Benefit Analysis:The 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

7. Cost-Benefit Analysis:The 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

8. Cost-Benefit Analysis:Social 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)

9. Cost-Benefit Analysis:Social 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

10. Cost-Benefit Analysis:Social 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

11. Micro-costing of Social Cost:A Guestimate

12. Cost-Benefit Analysis:Social Costs of Incarceration (4) • Bottom Line: Preliminary work suggests direct social costs are about twice the cost of lockup • Probably a conservative estimate

13. Cost-Benefit Analysis:Social 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

14. Cost-Benefit Analysis:Social 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

15. Cost-Benefit Analysis:Social 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)

16. Cost-Benefit Analysis:Scale 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 > Assault > Burglary > Drug use More benefit < > Less Benefit

17. Cost-Benefit Analysis:Scale 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 < > Less cost

18. Cost-Benefit Analysis:Prison as an Economic Space

19. Update: Prisoner Census (1)

20. Prisoner Census: Findings • Hawai’i’s 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

21. Update: Prisoner CensusDrug Felons

22. 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: Hawai’i is experiencing significant growth in categories of prisoners with the greatest total cost and the smallest social benefit

23. Cost-Benefit Analysis:Drug Felons in Hawai’i Net Incarceration Cost Calculation

24. Cost-Benefit Analysis:Drug Felons in Hawai’i Social Benefit Calculation

25. Cost-Benefit Analysis:Drug Felons in Hawai’i • Cost-benefit Comparison

26. Threshold Analysis Threshold values of total cost and social benefit per inmate per year

27. Cost Comparisons Social benefit and social cost of incarcerating Hawai’i drug felons per average sentence

28. Cost-Benefit Analysis:Drug Felons in Hawai’i • Considerable amounts of treatment can be provided for these costs • Hawai’i’s 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

29. Drug Felons in Hawai’i:Lessons Learned Conclusions • It’s 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)

30. Drug Felons in Hawai’i:Lessons 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

31. Cost-Benefit Analysis:Acknowledgements 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 (414) 359-1040, x. 3637 tlengyel@Alliance1.org