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As a bottom-line matter, Mc Donald says “the uncounted costs of public operation are probably larger than of private operation”; I tend to agree, but it’s hard to say for sure.The best way to see the importance of various assumptions is to look at a handful of cases where different people tried to estimate the same cost.

And third, when public or private prisons incur overhead expenditures, there’s no obvious way of allocating overhead to particular facilities—Gerald Gaes gives a specific numerical example involving Oklahoma, a high-privatization state, where a difference in overhead accounting can alter the estimate of the cost of privatization by 7.4%.

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How do we determine whether the private sector costs more or less than the public sector?

Ideally, we could work off of a large database of public and private prisons and run a regression in which we controlled for jurisdiction, demographic factors, size, and the like.

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This site gives all of you sorts of extraordinary stuff with a low cost for enrollment.In practice, this large database doesn’t exist, and so the typical study chooses a small set of public and private prisons that are supposedly comparable.Unfortunately, this comparability tends to be elusive; the public and private facilities compared often “differ in ways that confound comparison of costs.” Sometimes no comparable facilities exist.An analysis of Britain’s energy market found the largest independent provider, First Utility, was the worst culprit and charges customers an average of £394 a year more once their fixed tariff runs out – an astonishing 53 per cent increase.Npower, which was fined £26 million last year for sending out inaccurate bills, was second on the list.Its standard energy tariff is £348 a year more expensive than the 12-month fixed deal it offered in July.