The proposed U.S.-Mexico border wall has received a lot of debate over its projected construction cost, but a simple analysis suggests the wall would actually be cost-beneficial.
Department of Homeland Security (DHS) Deputy Secretary Elaine Duke told Congress on March 8 that Customs and Border Protection (CBP) is conducting a cost-benefit analysis for wall construction. According to a DHS internal report seen by Reuters, the wall will cost as much as $21.6 billion and take more than three years to build. If it is assumed the total undiscounted cost would occur in the first year, what are the quantifiable and non-quantifiable benefits for a break-even analysis?
The researchers conducting the cost-benefit study will examine potential benefits, such as fewer drug-overdose fatalities and illnesses, the cost savings associated with fewer border apprehensions, and the cost savings associated with fewer crimes committed as a result of illegal border crossings, just to name a few. The category that may account for the greatest benefit is the fewer number of drug-overdose fatalities.
The Department of Transportation calculated in 2015 that the value of reducing fatalities and injuries by regulations or investments is statistically $9.4 million per life, a number that is higher still today, accounting for inflation. In 2015, there were 52,404 overdose deaths in the United States, and the number has been increasing steadily over the past several years. If each of these fatalities were instead considered as injuries (considered to be synonymous with an illness), the fractional value would be .593 for a critical injury and .266 for a severe injury.
If we assume that the border wall could prevent 10% of the total overdose deaths in the United States, as many as 5,220 deaths might be prevented. (Note: This may be an oversimplification because the proportion of some drugs crossing the border is different depending upon the drug.) Many of these people, however, might still be hospitalized but for something less severe. If these survivors were instead considered to be critically ill, the cost savings would be ($9,400,000 * .593 = $5,574,200; $9,400,000 – $5,574,200 = $3,825,800) about $3.8 million per individual. (The less severe the injury, the greater the benefits per individual. The estimate of $3.8 million is the most conservative for this analysis.)
Multiplying 5,220 fewer deaths per year by a cost savings of $3.825,800 per death, the economic benefits associated with a 10% reduction in overdose fatalities would be nearly $20 billion annually. Subtracting $20 billion from estimated $21.6 billion construction cost means that for the first year alone, the monetary benefits associated with the other benefit categories need only equal $1.6 billion.
This analysis is not conclusive of all benefits and costs. It is meant to show, however, that applying a very conservative set of assumptions suggests that debate over building a wall is probably not due to potential costs and benefits, but more likely, politics.