Methods of Calculating the Marginal Cost of Incarceration: A Scoping Review

• Author: Jocelyne Lemoine,Stuart John Wilson
• DOI: 10.1177/08874034211060336
• Date: 01 July 2022
• Published date: 01 July 2022
• Subject Matter: Essay

https://doi.org/10.1177/08874034211060336

Criminal Justice Policy Review

2022, Vol. 33(6) 639 –663

© The Author(s) 2021

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DOI: 10.1177/08874034211060336

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Essay

Methods of Calculating

the Marginal Cost of

Incarceration: A Scoping

Review

Stuart John Wilson1 and Jocelyne Lemoine1

Abstract

Criminal justice reforms and corrections cost forecasts require appropriate estimates

of the marginal costs of incarceration to adequately assess cost savings and projections.

Average costs are simple to calculate while marginal cost calculations require much

more detailed data and advanced methods. We undertook a scoping review to

identify, report, and summarize the existing academic and gray literature covering

the different estimation methods of calculating the marginal costs of incarceration,

following the Arksey and O’Malley framework. Eighteen publications met criteria for

inclusion in this review, with only one from the peer-reviewed literature. The three

main approaches in the literature and their use are reviewed and illustrated. We

conclude that there is a lack of, and need for, peer-reviewed literature on methods

for calculating the marginal cost of incarceration, and marginal cost estimates of

incarceration, to assist program evaluation, policy, and cost forecasting in the field

of corrections.

Keywords

marginal cost, corrections, incarceration, scoping review, program evaluation

The Costs of Incarceration

After many years of rapid growth, the adult incarceration rate in the United States has

been declining steadily since 2008. In 2018, the adult incarceration rate in the United

1University of Regina, Saskatchewan, Canada

Corresponding Author:

Stuart John Wilson, Faculty of Arts, University of Regina, 3737 Wascana Parkway, Regina, Saskatchewan,

Canada S4S 0A2.

Email: stuart.wilson@uregina.ca

1060336CJPXXX10.1177/08874034211060336Criminal Justice Policy ReviewWilson and Lemoine

research-article2021

640 Criminal Justice Policy Review 33(6)

States was 650 adult inmates per 100,000 Americans, a decrease of 8% from 2008

(760 adult inmates per 100,000 Americans; Maruschak & Minton, 2020). Despite the

decrease, the United States continues to have the highest incarceration rate in the

world. By comparison, the incarceration rate in 2018 was 604 in El Salvador (the high-

est for the rest of the Americas), 324 in Brazil, 214 in New Zealand, 172 in Australia,

140 in England and Wales, 127 in Canada, 75 in Germany, and 41 in Japan (Malakieh,

2020; Walmsley, 2018). Furthermore, the amount of government spending on incar-

ceration in the United States continues to increase even though the incarceration rate

and the number of incarcerated individuals have declined. Total state spending on cor-

rectional institutions was approximately US$42.1 billion in 2016, an increase from

US$33.4 billion in 2006, by 26% in nominal terms and by 7% in real terms after

adjusting for inflation (Hyland, 2019; Perry, 2008, U.S. Bureau of Statistics, n.d.).

The high monetary costs of imprisonment and highest rate of incarceration in the

world are some of the factors that are driving the demand for criminal justice reform

in the United States (Executive Office of the President of the United States [EOP of the

United States], 2016). The present high incarceration rate and prison population num-

bers in the United States are mainly the result of policies that have promoted heavier

penalties, as examples, longer minimum sentences, harsher penalties for repeat offend-

ers, three-strikes-and-you’re-out laws, truth-in-sentencing laws, as well as the expan-

sion of criminal code offenses and higher conviction rates (Austin et al., 2016; EOP of

the United States, 2016; Mai & Subramanian, 2017; National Research Council,

2014). Meanwhile, governments are struggling with tight budgets, and are looking at

ways to minimize the growth in incarceration and spending. To effectively do so, pol-

icy-makers must have a good awareness of the fiscal implications of potential reforms

and alternatives to incarceration, and make informed decisions that will result in poli-

cies that reduce the costs to governments and to society as a whole (Austin et al., 2016;

Henrichson & Delaney, 2012). Furthermore, cost savings for the government from

incarceration reforms present opportunities to spend money on effective alternatives to

prison time, such as probation, electronic monitoring, treatment, community service,

fines, and restitution, and to support education and employment opportunities of at-

risk groups to reduce crime and arrest rates (Austin et al., 2016; EOP of the United

States, 2016).

To understand the fiscal impact of reforms, we must understand and quantify the

costs of incarceration. Current estimates of the costs of incarceration are often gener-

ated in practice by taking total aggregate direct government spending on incarceration,

and then calculating the average cost per inmate. This average direct cost estimate is

relatively simple to calculate, and total spending and population data are often pub-

lished and freely available (Mai & Subramanian, 2017; Maxwell, 2015). However,

average cost figures are not the best figures to use to forecast custody costs with pro-

jected changes in prison populations, nor for evaluating the net benefits of new pro-

grams and policies to reduce incarceration and its costs (Henrichson & Galgano, 2013;

Maxwell, 2015; McDonald, 1989; Shabses, 2013). These total and average direct costs

of incarceration include many cost components which do not vary with changes in the

prison population. For example, costs of central administration may not change with