Benefit-Cost Analysis of Supermax Prisons

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

Note: This report is available in its entirety in the Portable Document Format (PDF).

Overview

During the past two decades, states have increasingly relied on super-maximum security units to handle their most violent and disruptive inmates. The hope is that greater order and safety will result, along with other corrections goals. But what exactly is the "bang for the buck" of supermax prisons? That is, how do the benefits compare with the costs of investing in these high-security correctional facilities? The question is important because supermax housing constitutes a significant investment of scarce resources and because of the greater emphasis states currently are placing on accountability and fiscal responsibility.

Benefit-cost analysis (BCA) is an economic analysis tool that can assist policymakers and corrections officials to determine whether investing in supermax housing likely represents an effective allocation of resources. This policy brief presents the basic steps involved in a BCA:

1. Clearly state the question under consideration.
2. Determine the perspective.
3. Identify benefits and costs.
4. Assign values to benefit and cost items and compare total benefits and total costs.
5. Address issues of uncertainty using sensitivity analysis.
6. Incorporate a time (temporal) dimension and discounting into the analysis.
7. Articulate the limitations of the methodology and the analysis.

We believe that benefit-cost analysis can be understood by policymakers and corrections officials, that it can be informed by their knowledge and insights, and that the critical decisions about what goes into a BCA should not simply be left to researchers and consultants. We also believe that if applied and interpreted with care and caution, this analytical tool can greatly assist states to make more informed and fiscally responsible decisions.

Note: This report is available in its entirety in the Portable Document Format (PDF).

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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