State correctional spending and the private prison industry
Date
2019
Authors
White, Weston, author
Pena, Anita Alves, advisor
Weiler, Stephan, committee member
Mushinski, David, committee member
Suter, Jordan, committee member
Journal Title
Journal ISSN
Volume Title
Abstract
The efficacy of using private contractors to house prisoners has been debated since the first private prison was built in the 1980's. Most of the previous research on private prison costs has focused on case study analysis and has failed to reach a conclusive decision on whether any savings accrue from contracting with private companies. This paper contributes to economic research by examining data over seventeen years across 50 states on their correctional expenditures and the percent of prisoners they have in private prisons to determine whether private prisons are actually cost saving for states to use. To do this, I make use of a fixed effects econometric model to examine if there are any savings associated with contracting out prison services. This paper also examines the effects of other factors have on correctional expenditures and with prison privatization. The results suggest that privatization has little effect on correctional expenditures and other factors impact correctional expenditures in a statistically significant degree such as poverty and the government ideology of a state.