Cost-Benefit Analysis of Juvenile Justice Programs

Cost-Benefit Analysis of Juvenile Justice Programs

Purpose

To examine how the use of cost-benefit analysis can inform and focus policy with regard to the disposition of juveniles adjudicated for a delinquent or status offense (such as probation versus residential custody).

Background

Claims of cost-effective programs are legion. Similarly, those in charge of making resource allocations insist on concrete evidence of a program’s effectiveness and efficiency in providing a specific good. Because resources are measured in dollars, often these decisionmakers also want to see benefits measured in monetary values. With regard to dispositional options following adjudication, no solid cost or benefit data (measured in dollars) exist.

Economists have used the methods of cost-benefit analysis for a number of years in analyzing public expenditures. Basically, in this type of analysis, the costs of a particular program are measured in financial terms, generally including both instant costs and future costs and accounting for any discount or interest rates. The benefits of a program are also measured in financial terms, again including instant costs and long-term costs and accounting for discount and/or interest rates.

However, this particular evaluation method has, for a variety of reasons, only recently been adopted in the juvenile justice area. First, the language of cost-benefit analysis is particular to the arena of economics, and as such it is difficult for someone outside the field to fully understand the methodology. Second, the quality of data relating to costs and benefits in juvenile justice has been weak across segments of the system and across jurisdictions. Without cost data that measure each segment consistently, the analysis cannot be done. Third, the benefits of particular juvenile justice dispositions are notoriously difficult to quantify, particularly in terms of dollars.

However, the usefulness of this evaluation method has not gone unnoticed. Recent studies (such as the 1996 RAND study) have shown how such analyses can inform decisionmakers on the optimum allocation of public expenditures. In particular, when considering long-term options, some program options may prove to be less expensive even though their short-term costs may exceed other options.

Goals

To explore more fully the methodological and practical issues surrounding the use of cost-benefit analysis in the juvenile justice arena and to provide a basis for formulating a consensus concerning how to measure the costs and benefits of juvenile probation, detention, and corrections.

Objectives

The objectives of this program are to:

Determine the components that figure into the costs of probation.
Develop a method of allocating these costs to calculate a per-client cost of probation.
Determine the components that figure into the costs of residential custody (including capital costs).
Develop a method of allocating these costs to calculate a per-client cost of residential custody.
Determine which comparisons are most appropriate for this manner of cost-benefit analysis (that is, how to control in the analysis for the most salient demographic and offense characteristics) and identify the implications such comparisons pose for the routine collection of data of the population of juveniles on probation and in custody.
Determine a method of measuring the benefits associated with each type of disposition (possibly including an analysis of recidivism).

Program Strategy

OJJDP expects this project to lay the framework for a serious, substantive cost-benefit analysis of juvenile probation and/or juvenile residential custody. The project must address the specific goals and objectives indicated in this solicitation. However, the applicant has the flexibility to develop a specific strategy to meet these purposes.

Products

This project will produce two products:

A final report that spells out specific recommendations for developing routine cost-benefit analyses for dispositional options. These recommendations should first address, at a minimum, how to collect information on the costs of various types of juvenile probation and juvenile residential custody (such as detention, training schools, halfway houses, and boot camps). The recommendations should also address how to measure the benefits of such dispositions.
OJJDP expects to use the information in this report in developing routine data collections covering the costs of various dispositional options. Although plans for such collections are preliminary, the Office expects to collect such information at different levels of jurisdiction including Federal, State, and local. Also, this information will be used in assisting State and local agencies in developing their own methods of cost-benefit analysis.
A journal-ready article on the use of cost-benefit analysis in the area of juvenile probation and/or juvenile residential custody. The article should include a discussion of the practical applications of cost-benefit analyses or present an authentic use of this methodology. This article will be peer-reviewed by OJJDP and, at the Office’s discretion, published by OJJDP. The authors may also submit the article to scholarly journals for publication.

Eligibility Requirements

OJJDP invites applications from public and private agencies, organizations, institutions, or individuals. Private, for-profit organizations must agree to waive any profit or fee. Joint applications from two or more eligible applicants are welcome, provided that one is designated primary applicant and any others are coapplicants.

Selection Criteria

Applicants will be evaluated and rated by a peer review panel according to the criteria outlined below.

Problem(s) To Be Addressed (25 points)

Applicants should describe in the narrative section how cost-benefit analysis can positively affect decisions on public expenditures. Applicants can use this opportunity to indicate their understanding of public finance and the decisionmaking process for financing juvenile justice programs at various government levels.

As part of this narrative, applicants should show a strong understanding of cost-benefit analysis. Further, applicants should indicate how this evaluation method can inform decisions in the allocation of resources for juvenile justice. Applicants should also identify any potential drawbacks of this type of analysis.

OJJDP expects this project to build on experience. Consequently, applicants should include a relevant literature review indicating the state of the art in cost-benefit analysis in the juvenile justice arena. Applicants might also consider including relevant statistics that indicate a thorough understanding of the subject. Applicants are also encouraged to look to State and local agencies that have performed such analyses for insights in the performance of such analyses.

Goals and Objectives (15 points)

The application must indicate clearly measurable goals for this project. These goals should directly relate to OJJDP’s goals as stated above.

The application must also provide quantifiable objectives that the applicant will use to reach these goals. Generally, the objectives should be tied to a timeline.

Project Design (25 points)

The applicant must indicate clearly the steps that will be taken to accomplish the goals of the project. The applicant must clearly describe these steps and how they will lead to the project goals. Further, the applicant must indicate what these steps entail (e.g., travel, literature review, surveys, interviews).

Applicants must include a timeline with the application. This timeline should indicate what products (including initial and final drafts of the two required products) will be delivered to OJJDP and when. OJJDP regulations require a narrative progress report at least every 6 months (due in January and July); the timeline should include these reports as deliverables. Also, the applicant should include sufficient time for final products to be reviewed and revised.

Management and Organizational Capability (25 points)

Applicants must describe who will carry out the project design and how. Specifically, the application must indicate all principal individuals and their positions in the project management design.

Applicants must demonstrate that the individuals involved in the project have the experience and knowledge necessary to successfully complete the project. In reviewing applicants’ capabilities, particular attention will be paid to the experience and capabilities of the overall staff in the use and application of cost-benefit analysis and in general knowledge of the juvenile justice system. Therefore, applicants are encouraged to follow a cross-disciplinary approach to ensure that all relevant skills and abilities are represented in the staffing mix.

The application should also indicate clearly who will perform which function. (Applicants may want to include this information in the timeline to provide a direct graphical interpretation as well.) Applicants should include a one-page organizational chart to graphically portray the management structure of the project.

If the applicant will be working with another organization, the relationship between these organizations must be clearly indicated. Any written agreements or memorandums of understanding must be included in the appendixes.

Applicants should also identify the corporate capabilities of their organizations. Such a statement should include a description of other similar programs completed or being run by the organization. Also, the applicant should indicate the level of internal support available to the project including such things as support staff, computing capabilities, and the like.

Applicants should include an advisory board in the project structure. This advisory board will be responsible for reviewing the project design and the final products. Applicants may choose to involve advisers in other capacities as well; however, advisers must be independent of the project management team.

Budget (10 points)

Applicants must provide a proposed budget that is complete, detailed, reasonable, allowable, and cost effective in relation to the activities to be undertaken.

Format

The narrative must not exceed 25 pages in length (excluding forms, assurances, and appendixes) and must be submitted on 8½- by 11-inch paper, double-spaced on one side of the paper in a standard 12-point font.

Award Period

The project will be funded for 24 months in two 12-month budget periods. Funding after the first budget period depends on grantee performance, availability of funds, and other criteria established at time of award.

Award Amount

Up to $100,000 is available for the initial 12-month budget period.

Delivery Instructions

All application packages should be mailed or delivered to the Office of Juvenile Justice and Delinquency Prevention, c/o Juvenile Justice Resource Center, 2277 Research Boulevard, Mail Stop 2K, Rockville, MD, 20850; 301-519-5535. NOTE: In the lower left-hand corner of the envelope, you must clearly write "Cost-Benefit Analysis of Juvenile Justice Programs."

Due Date

Applicants are responsible for ensuring that the original and five copies of the application package are received by 5 p.m. ET on August 11, 1997.

Contact

For further information, call Joe Moone, Program Manager, Research and Program Development Division, 202-616-3643, or send an e-mail inquiry to [email protected].

References

Greenwood, P., K. Model, C. Peter Rydell, and J. Chiesa. Diverting Children From a Life of Crime: Measuring Costs and Benefits. Santa Monica, CA: RAND Corporation, 1996.

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