Would you like to open up a tab? Do you know you get free shipping with prime membership? How would you like to save 15 percent or more on car insurance with our new monthly plan?
You don’t need to be a brain scientist to understand why companies go to such lengths to make the payment process so easy: It’s because when consumers are distracted from the costs of our consumption decisions, we over-consume. I am a brain scientist, and it dawned on me one day that this distraction effect might not just influence beer consumption, books, and car insurance. For even the most important decisions, such as healthcare, voting, and criminal justice decisions, the costs are often conveniently obscured. Their absence could sway our decision-making in quiet but pernicious ways.
To understand how, imagine you’re at the grocery store, and you notice that the price tag on the milk is missing, so you ask the cashier for a price check, and the cashier says, “Oh, we don’t disclose that information until after you agree to buy it. We feel that disclosing the price would affect your shopping decisions.” (Darn right, it would affect my shopping decision!)
This story, of course, sounds absurd. And yet, you pay for all sorts of things that way. Take your dental visits, for instance. Before seeing your dentist, you sign a contract stating that you will pay the bill. If you ask the assistant what the cost of some procedure will be, the assistant will say, “Oh, we don’t have that information, hun, but once your visit is over, your insurance will calculate your out-of-pocket cost.” .”
Sure, you can ask your insurance for an estimate in advance, but that’s exactly the point—it requires effort. And once you’re in the chair, and the dentist recommends a routine x-ray even though you swore you had one just six months ago, are you really going to say, “Hang on, I’m calling my insurance company first” ? Of course not, and your dentist and insurance company profit from that.
The Hidden Cost of Incarceration
Here’s an even more disturbing example: criminal sentencing. Suppose Joe Shmoe gets caught selling illegal drugs. When the prosecutor brings forth the drug trafficking charges, it’s her job for her to make a sentencing recommendation in a pre-sentencing report presented to the judge: Four years in prison, let’s say. Then, it’s the judge’s job to rule on the actual sentence: Three years plus community service.
Now, if you—a concerned taxpayer—are sitting in the courtroom that day (because, like me, that’s your idea of a good time) and you want to run a price check on that sentence, good luck asking the judge. As with your dental visit, the machine is already whirring and ready to fire. If the judge takes pity on you for your absurd financial question, the best response you could possibly get is this: “Oh, we don’t introduce that kind of information, hun. We believe that admitting information about the cost of incarceration could affect the sentencing decision.”1 A less piteous judge might threaten to hold you in contempt of court for introducing such costs in court.two
Of course, you could just Google it, but alas, you have better things to do, so allow me to do it for you: The average annual cost to incarcerate Mr. Shmoe drug dealer, is over $33,000 taxpayer dollars.3 That includes facilities costs but does not include the many collateral consequences of incarceration for offenders’ familiesFour. Five or the costly possibility that Mr. Shmoe will be even more dangerous coming out of prison than going in.6
Ok, incarceration may be costly, but isn’t the cost irrelevant? After all, this is supposed to be a moral decision, not an accounting decision. But there’s the rub: costs do represent moral values. This is because each additional year in prison could otherwise pay for other morally valued services, such as four years of community college,7 seven years of community supervision8 over five years of specialty probation for treating individuals with mental illness9 or a more dangerous offender tomorrow.
Knowing this, do you still want the drug dealer to be incarcerated for three years? Or might two be sufficient?
My colleagues, Kleider-Offut, Brosnan, and I posed that question to 178 US prosecutors. Prosecutors are already versed in the typical incarceration costs, but traditionally, it’s not their job to worry about costs, so we might not expect this information to affect their judgments. Indeed, some critics have referred to this luxury as a “correctional free lunch” where prosecutors and judges get to order as much punishment as they fancy because they are not held accountable for the cost, which is offloaded to other levels of government.10
But in our study, mere exposure to brief information about the cost of incarceration did reduce prosecutors’ sentencing recommendations–on the order of 30 percent.eleven That’s about a one-year reduction for Mr. Shmoe and $33,000 taxpayer dollars now available for other uses. Stated differently, when true information about the cost of incarceration was hidden from prosecutors, their sentencing recommendations increased by almost a third.
If prosecutors stand to gain by showing that they’re tough on crime, then why were the prosecutors in our study so receptive to the cost information? One answer is that they are able and willing to recognize the difficult tradeoffs inherent in their sentencing recommendations, but they just need a little nudge. Our research indicates that prosecutors find the costs relevant to their sentencing decisions.
We’ve recently found the same pattern in a study of 87 professional judges,12 confirming the notion that they think costs are, in fact, relevant to their decision, but unless those costs are explicit, they neglect to consider them. So the fact that prosecutors and judges are discouraged from considering sentencing costs alongside the benefits is likely to inflate their sentencing decisions. This could help explain why so very many Americans are behind bars.13
Increasing Transparency in Sentencing
When consumers are distracted from the costs of our consumption decisions, we consume to no end. And as long as criminal sentencing is paid for with an open tab, the US will continue to drown in punishment. But eventually, we have to pay that tab in one form or another. This realization has inspired a recent wave of policy-makers to develop ways to increase the transparency of both the costs and the benefits of incarceration to prosecutors and judges, such as California Bill 1474.
Such policy efforts recognize that, yes, exposure to the costs alongside the benefits might affect our decisions. Yes, it might motivate you to buy the less expensive, less tasty milk now and then or skip frivolous dental procedures. Or it might result in less reliance on lengthy prison sentences and more reliance on preventative and therapeutic services.
Then again, if those alternatives are less important to the decision-maker, it might not affect the decision at all. In either case, it seems reasonable to presume that this choice about what’s important should be up to the decision-maker based on her unencumbered access to all relevant information.