Last Revised: 5/6/99

Prison: Where the Money Is

by Fox Butterfield,

       Can society afford to eliminate crime?
       No, on two counts, says Mark A. Cohen, an economics professor at Vanderbilt University's Own Graduate School of Management. "Society cannot afford a zero crime rate," he said. "We would bankrupt ourselves, and we'd also have a society we wouldn't like." The society created, he said would resemble the old Soviet Union.
        Yet Mr. Cohen's own studies, which estimate that crime costs this country roughly $500 billion a year, including costs to victims and the price of running prisons, leave a nagging question in a campaign year when the issue has already been injected into Presidential politics: Ideology aside, what is the most efficient way to reduce crime? Mr. Cohen's calculations have ignited a debate among academic experts, law enforcement officials and politicians.
        "Whether his estimate is exactly right or is off by $100 billion doesn't matter because we know the number is so big," said David Rasmussen, a professor of economics at Florida State University who has evaluated crime costs for the Florida Legislature." The real question is not the exact dollar figure, but how we could use it to run our prison system more effectively or establish more crime prevention programs."
        Important results might be gleaned from economic studies of the most effective way to reduce crime, said Jeffrey Roth, a principal research associate at the Urban Institute. "The real question is where will you produce the most crime reduction for a dollar spent," Mr. Roth said. "This is not a liberal versus conservative question. It's a bang for the buck question."
        The stakes in this argument are high because a number of states find themselves squeezed between an angry public's demand for getting tough on crime and the escalating costs of building more prisons. This year, for the first time, California is spending more for building and operating prisons than for its vaunted public colleges and universities. Prisons are the fastest growing item in almost all state budgets.
        But is $500 billion a realistic figure? Some criminologists not only criticize such estimates as excessive, but say economists like Mr. Cohen use arbitrary and inconsistent calculations. Mr. Cohen's recent report, prepared for the Justice Department, included intangible factors like pain and suffering and reduced quality of life, which he based on jury awards; he calculated that the annual total came to $450 billion.
        Another $40 to $50 billion came from the cost of running state and Federal prisons and local jails, bringing the total close to $500 billion. This figure excludes the losses in poor, high-crime neighborhoods from depressed property values, disinvestment and shuttered businesses.

Cost Analysis

       Franklin Zimring, director of the Earl Warren Legal Institute at the University of Califrnia at Berkeley, who calls the $500 billion estimate a "phony number" and "junk science," is worried that by fixing the cost of crime so high, the building of prisons look like a cheap and therefore more politically palatable answer to crime.
        Most earlier studies of this issue have merely attempted to look at whether prisons pay for themselves. John J. DiIulio Jr., a professor of politics and public affairs at Princeton University, has concluded that prison does pay after surveys of inmates in New Jersey and Wisconsin state prisons. Mr. DiIulio found that inmates there had committed 12 or more crimes in the year before their incarceration, excluding drug offenses. Given the cost of $25,000 to keep a prisoner behind bars for a year, he said that for every dollar spent to keep a prisoner locked up,"society saves at least $2.80 in the social costs of crimes averted."
        The conventional wisdom these days is to keep criminals in prison longer. Mr. Cohen, who has studied the cost benefits of prison terms, said that while a longer sentence would be economically efficient in reducing rape, assault and automobile theft, it would not be in diminishing burglary and larceny. The cost of added time for these two crimes, he said, would be greater to society than the price of the crimes committed.
        A forthcoming study by Peter Greenwood of the Rand Corporation attempts to measure the relative cost efficiency of prevention versus prison. An examination of four prevention programs in different states, including Head Start, a parent training program, a program to keep high-risk juveniles in high school and an experimental program with 12- and 13-year old delinquents, found that these programs "would be twice or three times as cost effective as just putting people in prison.," he said.
        In a study soon to be published, Mr. Cohen estimates that preventing a high-risk youth, so called because he comes from a troubled family and a bad neighborhood, from becoming a career criminal would save society $1.5 million to $2 million.
        Mr. Greenwood and Mr. Cohen acknowledge that prevention is a long-term policy, and that the public and politicians want immediate benefits. Another difficulty is that Americans appear to be willing to tolerate government if it means more prisons but not new social programs.
        Mr. Greenwood, however, believes: "If we can afford to build prisons, we can afford prevention. It would save prison cells later."

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