Narrow or Broad Cost–Benefit Analysis?

• Date: 01 November 2015
• DOI: http://doi.org/10.1111/1745-9133.12166
• Published date: 01 November 2015

COMMENTARY

ROLE OF THE COST-OF-CRIME

LITERATURE

Narrow or Broad Cost–Benefit Analysis?

Charles F.Manski

Northwestern University

Criminology & Public Policy commissioned Dom´

ınguez and Raphael (2015, this

issue) to describe the methodology of a particular version of cost–benefit analysis

(CBA) and its application to criminal justice policy. I expect that readers will

find their article highly informative about the principles and practice of this version of

CBA.

Yet I am concerned that readers who are unaware of the history of welfare economic

evaluation of public policy will draw the inappropriate conclusion that Dom´

ınguez and

Raphael (2015) provide a full picture of the subject. In fact, the version of CBA covered by

Dom´

ınguez and Raphael embodies a narrow (I might also say pernicious) perspective that

has long been controversial among economists.

In this commentary, I first elaborate on the discussion of CBA that Dom´

ınguez and

Raphael (2015) give and then describe a broader form of CBA that they do not discuss. I

argue that the broader form of CBA is more appropriate for evaluation of criminal justice

policy.

Willingness to Pay and the Kaldor–Hicks Criterion

The version of CBA that Dom´

ınguez and Raphael (2015) discuss seeks to measure the

monetary amount that each member of a population would be willing to pay for a specified

change in policy relative to a given status quo (or, alternatively, the amount he or she

would be willing to pay to preserve the status quo). Willingness to pay may be positive or

negative depending on how a change in policy would affect an individual. The methodology

aggregates willingness to pay across the population and uses the result to evaluate the

worthiness of a policy change.

Dom´

ınguez and Raphael (2015) are careful to call attention to some prima facie

unpalatable features of this version of CBA. They caution that it “provide[s] a very specific

Direct correspondence to Charles F. Manski, Department of Economics, Northwestern University, 2001

Sheridan Road, Evanston, IL 60208 (e-mail: cfmanski@northwestern.edu).

DOI:10.1111/1745-9133.12166 C2015 American Society of Criminology 647

Criminology & Public Policy rVolume 14 rIssue 4