Introduction:

The aim of this paper to elaborate a cost-benefit analysis to estimate the convenience of investing in a new prison within San Pedro Cholula, a municipality located in the Mexican Federal State of Puebla.

Method:

We use a methodology proposed by Canavagh P. David and Mark A.R. Kleinman (1990) who develop a cost-benefit analysis of building a prison in the United States considering four concerning participants: government, families, enterprises and society.

Results:

Based on an Internal Rate of Return of 48% and a cost-benefit relation of 1.77, it turns out that the construction of a new facility is convenient and recommendable under the present tenets.

Conclusion:

Overpopulation and precarious conditions prevail in most Mexican prisons nowadays. Corruption, violence and permanent violations of human rights are business as usual and the Cholula prison is not the exception. That is why, a new facility, away from the urban area is not only necessary but urgent, in order to improve the general conditions of the local population.