Research Summary In this article, we review the theoretical paradigm underlying cost–benefit analysis and address some of the critiques of this framework that have arisen within criminal justice circles and other policy areas. We also review existing studies devoted to estimating the costs of specific crimes. We offer a brief discussion categorizing the alternative costs of crime and the various methodological approaches taken (hedonic analysis, contingent valuation, and accounting methods), with an explicit discussion of the relative strengths and weaknesses of each approach and debates within the economics profession pertaining to these methodologies. We argue that cost considerations broadly defined should be of central importance in criminal justice policy debates. However, we also highlight the potential for cost‐consideration and important equity criteria to come into conflict. Policy Implications Policy makers should consider careful cost–benefit analysis as an important criterion in criminal justice policy. Given some features of criminal justice policy choices such as the unequal distribution of the costs of criminal victimization, anti‐crime enforcement, and the potential for perceived illegitimacy of the criminal justice system to undermine various public institutions, we argue that equity considerations also deserve careful attention. In practice, we place greater confidence in the use of cost‐of‐crime estimates to judge the relative effectiveness of alternative interventions, and we are cautious regarding policy prescriptions emanating from benefit–cost ratios that are marginally greater than one.