The use of economic analysis (EA) in crime and justice research has increased in recent years from the need to quantify the effectiveness and efficiency of interventions and policies. The New Welfare Economics model pursues an economic decision rule known as the Kaldor-Hicks criterion. This rule forms the underlying rationale for cost-benefit analysis (CBA). In short, CBA is used to evaluate options (e.g., interventions, programs, or policies) by comparing the total benefits with the total costs of the respective options. Results of EA assist in informing policy on the economic feasibility of the options in question. This entry briefly summarizes the underlying conceptual foundations of CBA and why CBAs are important to policy decision-making from a societal perspective. To illustrate the use of CBA, this entry provides two examples of CBAs conducted of third-party policing interventions highlighting potential limitations of the applied method.
Encyclopedia of Criminology and Criminal Justice
Criminology not elsewhere classified