Governments have long used cost-benefit analysis and related techniques to determine whether infrastructure such as roads or dams should be constructed. Cost-benefit analysis in crime prevention is a relatively new field—it has rarely been used even though crime costs the Australian community approximately $18 billion per year; that is, 4 per cent of Gross Domestic Product (GDP).
This paper outlines techniques of cost-benefit analysis and gives some evaluated examples in crime prevention. These are mostly overseas examples, as Australian analysis is in its infancy. It may be the case that a dollar spent on early childhood development will yield a greater net benefit than the same dollar spent on an additional prison cell.
Not all early intervention programs are necessarily cost effective. This paper cites the (American) Perry Preschool Program which, for every dollar spent on the program, the community gained roughly $7 work of benefits in crime reduction and improvement of life opportunities. It also cites the Hawaii Healthy Start Program which, for every dollar spent, yielded a benefit of only 38 cents.
In situational crime prevention, the measurements are easier and more direct. In the (British) Kirkholt housing estate, every £1 spent on a burglary reduction program yielded £5 in savings, while in an Australian study, every dollar spent by the Victorian Totalizator Agency Board (TAB) yielded a $1.70 benefit in reduced robberies.
As crime imposes considerable costs on society in terms of financial, emotional, and opportunities forgone, identifying and investing in effective programs is a winning strategy.