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A lot of people in research and practitioner communities seem to think that benefit-cost
analysis is really just about taking dollar values and monetizing impacts of crime control
interventions. But a benefit-cost analysis is only as useful as the program evaluation upon
which it’s built. You need to understand, and be sure that you understand the causal effects of
the policy or the program that you’re evaluating for starters in order for a benefit-cost
analysis to really be of any use for policy makers.
The opportunity cost is the value of what I could’ve been doing instead. And so one way to
think about how you would put a dollar value on that is if I were to work extra hours, say, if
I were to pick up a second job and do that on Saturday mornings or after school.
That second job would pay me some wage and we think that that wage reflects my value to
society for those extra hours and that’s one way to think about what the dollar value of the
opportunity cost is of the time that I donate to a mentoring or a tutoring program to
try and steer high-risk kids away from delinquency and violent behavior.