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

Date01 July 2022
Published date01 July 2022
Subject MatterEssay
Criminal Justice Policy Review
2022, Vol. 33(6) 639 –663
© The Author(s) 2021
Article reuse guidelines:
DOI: 10.1177/08874034211060336
Methods of Calculating
the Marginal Cost of
Incarceration: A Scoping
Stuart John Wilson1 and Jocelyne Lemoine1
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.
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.
1060336CJPXXX10.1177/08874034211060336Criminal Justice Policy ReviewWilson and Lemoine
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

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