South-Western College Publishing - Economics  
It's Getting Too Expensive to Put People in Jail
Subject Cost of Fighting Crime has Increased
Topic Scarcity, Choice and Opportunity Cost
Key Words

Cost, State and Local Spending

News Story

Since the last time such costs were calculated in 1999 , costs of fighting crime have increased from $147 billion to $167 billion in 2001, up from only $36 billion in 1982.

While arrests have risen only about 6% since 1982, and the number of court cases has increased only about 6%, costs have skyrocketed. The number of inmates has increased by a factor of 3, up from 488,000 in 1985 to 1.3 million in 2001. Much of this increase reflects more punitive sentencing, mandatory minimum sentencing, tougher laws, and "three strikes and you're out" enforcement of those laws. These laws were created in the 1980s and 1990s, when state budgets were increasing, and people were more concerned about law and order than they were about costs. Now, as states face bigger and bigger budget deficits, governments are looking to cut costs any way they can. In 2001, the criminal justice system accounted for about 7% of state and local government costs, about the same amount spent on health and hospital care.

Costs of new prisons and the rising costs of operating prisons, including additional security personnel and new security systems, have fostered a number of alternative proposals about the way the current judicial system operates. For example, many states are reconsidering mandatory minimum sentencing, relaxing penalties for minor parole violations, and reconsidering putting juveniles into adult prisons.


(Updated July, 2004)

Questions
1.

What has happened to the opportunity cost of fighting crime since the 1980s?

2. Many have advocated lowering prison costs by turning to rehabilitation rather than incarceration, especially for drug offenders. Suppose our society decided to rehabilitate drug offenders rather than send them to jail. Would this have any appreciable impact on those opportunity costs to society? Why or why not?
3. Suppose society did move toward rehabilitation of drug offenders rather than incarceration. What impact would this have on the market price of rehabilitation services? Use a graph of supply/demand to illustrate your answer.
Source Fox Butterfield, "With Longer Sentences, Cost of Fighting Crime is Higher." The New York Times. 3 May 2004.

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