This essay focuses on the application of cost-benefit analysis and cost-effectiveness analysis to the evaluation of the social effectiveness of early prevention, especially in regard to crime prevention. It probes the theoretical and practical obstacles in estimating the benefits of developmental prevention programs.
The focus of this essay is the economic evaluation of developmental prevention programs. It stresses that future economic evaluations of developmental prevention should use different analytic strategies. Three important changes were recommended in the way economic evaluations of early prevention studies are conducted. These changes concern three separate questions pertaining to the appropriate unit of analysis: individuals or criminal events; society or government; and the crime rate and its social consequences or the criminal event and its consequences to the victim? Arguments for all three changes are presented. Section I of the essay summarizes major findings from developmental criminology and prevention. Section II examines whether the unit of analysis should be the individual or the criminal event. Section III discusses alternative person-based strategies for benefit estimation. Section IV reviewed whether the unit of analysis should be government or society. Section V reviewed whether the unit of analysis should be the crime rate and its social consequences or the criminal event and its consequences to the victim. In the final section, Section VI, major points are summarized. Two strategies are suggested in estimating the economic benefit of achieving a qualitative improvement in an individual's life chances. First, studying the actual decisions that parents make in raising their children, especially when a child suffers from a conduct problem or cognitive disorder. Second, adapt the methods for measuring quality-adjusted life years in the medical domain to valuing developmental interventions. Investing in methods for better evaluating the effectiveness of developmental prevention programs will produce large returns.