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Estimating the costs of crime serves many purposes. At a very basic level, such estimates indicate the burden of crime for individuals and society. Victims often lose or have their property damaged. Replacing or repairing damaged goods, even in an era of widespread insurance, can result in substantial monetary loss. Victims also often sustain physical injury and suffer considerable psychological trauma. In seeking treatment or counseling, not to mention days lost from work, decreased productivity, and even long-term financial distress, victims of crime often experience a diminished quality of life and substantial financial burden. As the myriad consequences of crime are diverse and varied, estimates of monetary costs provide a common, easily interpretable measure for understanding the impact of crime on individuals and society.
Estimates of monetary costs also have important policy implications. They facilitate comparisons with the costs of other social ills, provide an indication of the relative importance of crime as a social problem, and give guidance for the general allocation of resources. Such estimates also help identify the relative harm for specific types of crime and indicate where policies and resources are best directed. Accurate estimates of the costs of criminal violence are also important for making cost-benefit assessments of different policy options. They facilitate assessments of the savings that might accrue from particular crimeprevention strategies. These can be compared to the costs of implementing particular strategies to assess the overall benefit of different policy options. Ultimately, accurate estimates of the costs of crime are central to understanding crime as a social problem and to the formulation and implementation of crime-related social policy.
While it is difficult enough to enumerate the many consequences of crime, it is considerably more difficult to quantify and monetize these consequences to estimate costs. While some costs are relatively easy to estimate, others are virtually impossible. Still, an extensive and growing body of research in criminology and economics has attempted to place dollar values on the pain, suffering, and loss that accompany criminal activity. This research paper provides a conceptual framework for estimating costs of crime and examines both costs of crime and vulnerability to such costs.
The Social Cost Framework
Typically, costs of crime are considered within a ‘‘social cost’’ framework. Economists refer to social costs as any resource-using activity that reduces aggregate well-being. Such a broad conceptualization considers issues well beyond the monetary costs of crime and includes a variety of resources often nonmonetary and sometimes not readily measurable. There are two broad categories of costs that can be considered when estimating the costs of crime. Direct costs are costs imposed by the offender and usually incurred by the victim. Indirect costs, on the other hand, stem from society’s response to criminal activity. These include costs arising out of the desire to prevent crime, as well as costs arising from society’s desire to punish known offenders and deter potential criminals.
Direct Costs of Crime
Estimates of the direct costs of crime are relatively clear. Criminal activity generates expenses for victims and occupies an offender’s time, time that could be spent in other resource-generating activities. Such costs are relatively easy to assess.
Costs borne by victims fall into four categories. First, there are out-of-pocket expenses, such as property damage and loss and costs of medical care. For example, national crime surveys indicate that approximately one-third of all violent crimes result in some property loss or damage, with the average violent crime resulting in a loss of approximately $137. Although insurance often covers partial or full restitution for such costs, victims can still be required to pay insurance deductibles and face higher premiums when renewing their insurance.
Second, victimization often results in physical injury, particularly in the case of violent crimes. Almost one-quarter of all victims of violent crime sustain some physical injury, of which almost 7 percent incur some form of medical expense and almost 5 percent receive hospital care. Injury during property crime is much rarer as much property crime involves no physical contact between victims and offenders. Compounding these expenses, a considerable proportion of victims has no healthcare insurance. At the same time, victims of crime often experience decreased productivity or lost wages due to absences from work. Time away from work is typically short, between one and five days, yet sometimes extends into weeks and even months.
A third category of costs stems from psychological trauma. Post-traumatic stress disorder (PTSD) and its symptoms are well-recognized consequences of criminal violence. Research on behalf of the National Institute of Justice found that one-quarter of all crime victims experienced a related PTSD, including nervous breakdowns, suicide ideation, and suicide attempts. Not surprisingly, victims of crime often seek assistance from various mental health services. Research indicates that almost half of all victims of sexual assault and approximately 5 percent of victims of assault and robbery incur costs for mental health services.
Finally, there are also less tangible costs, such as those stemming from pain, suffering, and reduced quality of life. As there is no established market value for intangible costs, estimation is more complicated. The most common strategy for estimating intangible costs is to base estimates on jury awards to crime victims and burn victims. Typically, these estimates are based on the portion of the jury verdict designed to compensate the victim for pain, suffering, and diminished quality of life.
Various works summarize the components to estimate the overall personal costs of crime. For example, the 1994 National Academy of Science report Understanding and Preventing Violence estimates that the average sexual assault costs victims approximately $68,800, while assault and robbery cost approximately $21,100 and $24,400, respectively. Although estimates of homicide are typically much greater and estimates of property and vice crimes are typically much lower, such work provides clear evidence that the personal costs of crime are substantial.
While less obvious, there are also costs incurred or hypothetically incurred by the offender. For example, both property and personal crime often involves the use of tools and weapons that may have been purchased by the offender. In addition to this, the labor and energy that offenders devote to criminal activity could hypothetically be put to more productive uses. In this regard, offender-related costs stem from the lost productivity of engaging in crime rather than other more normative activities. Finally, offenders often do not emerge unscathed from criminal interactions. Victims may injure offenders in the course of defending themselves. Offenders may be forced to abandon property, tools, and weapons, or have their vehicles damaged when fleeing crime scenes. While such costs may seem just, they still contribute to the overall costs of crime. To date, there have been few attempts to estimate offender-related costs comprehensively.
Indirect Costs of Crime
When considering and estimating direct costs of crime, the general focus is costs associated with the criminal act itself. In contrast to this, costs are also incurred through individual and societal reactions to crime. These can be considered the indirect costs of crime. As criminal activity is generally regarded as a damaging, undesirable, and antisocial activity, the many costs associated with preventing crime, responding to crime, and punishing offenders are substantial. One means of assessing such costs is to consider the various crime-related expenses associated with state agencies and those associated with private individuals and enterprises.
Public Sector Costs
A large and increasing proportion of state resources are devoted to responding to crime. In 1993 alone, over $97 billion was spent on criminal justice activity. While attributing all criminal justice expenditure as ‘‘crime related’’ costs is wrong as much criminal justice activity is more about maintaining order and assisting the public, there are still substantial crime costs stemming from state response to criminal activity. One gains a better sense of these costs by considering each specific stage of the criminal justice system.
An initial source of costs arises from police investigation and apprehension. The majority of police activity is reactive in that police are usually alerted or notified of criminal activity by victims or witnesses. The effectiveness of police services requires extensive expenditure on communications equipment, transportation equipment, and safety and apprehension equipment as well as the extensive manpower necessary to investigate crime and apprehend offenders. Determining the specific proportion of these costs that are directly attributable to crime requires assessing the amount of police activity that is explicitly devoted to crime investigation and response. Interestingly, there is considerable evidence that the vast majority of police activity, upward of 80 percent, is not directly related to crime.
In addition to policing, there are also costs associated with courts and the judiciary. With the objective of punishing the guilty and protecting the innocent, the courts are the central body of determining the legitimacy of criminal justice sanctions. Court-related costs attributable to crime consist largely of time and energy spent on criminal cases. Estimations of these costs focus on the average salaries of judges, prosecutors, and defense attorneys divided by the amount of time spent on criminal cases. A 1994 report for the National Academy of Science suggests that the average trial costs per case may be as high as $30,000, although only a fraction of all crimes result in a trial.
A final source of costs stems from the sanctioning of convicted offenders. Offenders can be subject to a wide range of sanctions. Some sanctions, including fines and community service, do not explicitly involve public costs, but instead represent a transfer of resources from the individual to the public. Other sanctions, such as probation, jail, and imprisonment, do involve substantial costs to the public. Incarceration, for example, is imposed in almost all murder cases, the majority of rape and robbery cases, and almost half of all aggravated assault convictions. Estimates of the crime-related costs involve estimation of the annual cost of incarceration per individual multiplied by the average length of time served. Probation, on the other hand, has institutional costs associated with the maintenance of probation offices. Combining estimates of the average costs of incarceration and probation, the cost of imposing sanctions per offense may be as high as $75,000 per murder, $5,000 per rape, and just over $3,500 for robbery and aggravated assault.
Private Sector Costs
In addition to costs associated with the public’s desire to apprehend and punish offenders, considerable other indirect costs are borne more directly by private individuals and commercial institutions. Costs associated with preventing criminal victimization are the main source of costs for both these groups.
Private citizens spend vast amounts of money to prevent crime victimization. Some of these costs are largely hidden. For example, houses and cars typically come with locks for doors. Yet, the price of the locks is built into the overall price of the house or car. Other costs are add-ons to purchases. Purchasing a bicycle typically involves the additional purchase of a lock. People often augment existing security precautions. Cars are fitted with alarms or other antitheft devices. Additional locks are added to doors and windows and old, less effective devices are replaced with new, more effective ones. Individuals may purchase dogs for security, thus incurring the costs of care and feeding. In even more extreme cases, people purchase firearms to protect themselves against intruders. National surveys show that almost 10 percent of all households own firearms primarily for protection. Importantly, all such costs are borne by individuals in the effort to protect themselves from criminal victimization.
Businesses and commercial establishments also spend considerable money on crime prevention. Commercial establishments, both large and small, often carry extra staff to guard against crime. Often such staff is specifically employed for crime-prevention purposes. Department stores may employ ‘‘floorwalkers’’ to guard against shoplifting, while bars and nightclubs employ ‘‘bouncers’’ as a means of protecting both patrons and property from harm and damage. Probably most significant, recent decades have seen the proliferation of security guards in both individual establishments and commercial venues such as shopping malls. The growth of private security has been so significant that it has dramatically outpaced the growth of conventional police and law enforcement.
In addition to personnel costs, various crime prevention devices are standard features in commercial establishments. Consistent with efforts to ‘‘target harden,’’ such devices make establishments less attractive by increasing risks of apprehension. For example, convenience stores purchase ‘‘height tape’’ to be placed on doors such that employees can estimate the height of a thief or robber fleeing an establishment. They also often have time-release safes to limit the amount of money that can be stolen in any given time. The presence of surveillance cameras has also proliferated in recent years. That both personnel costs and the adoption of various crime prevention technologies are typically factored into the everyday or routine operating expenses of businesses is a significant indicator of the degree to which crime prevention has become ‘‘normalized’’ in society.
Although less intuitive than the direct costs of crime, responses to crime and crime prevention strategies are important considerations in both understanding and estimating the overall costs of crime. The identification of such costs indicates the myriad ways in which citizens pay for crime. Importantly, a consideration of such factors demonstrates the generalized vulnerability to crime costs that all citizens bear rather than only those borne by those directly victimized by crime.
Distribution of Costs
Although our consideration of private expenditure on crime and crime prevention indicates widespread vulnerability to crime costs, it is important to recognize that costs of crime are not borne equally by all members of society. In particular, there are many geographic and social factors that increase vulnerability to criminal victimization and increase vulnerability to the costs of crime.
Over the past century, researchers have documented the importance of place for understanding crime. Differences in crime rates exist across countries, regions, counties, states, cities, neighborhoods within cities, and even across individual locations such as houses, restaurants, bars, and stores. Importantly, particular features of environments appear to influence the amount of crime within those environments and consequently influence risks of crime victimization.
Two factors stand out as prominent geographic risk factors for crime victimization. The first of these is resource deprivation. Areas that have high levels of poverty, higher income inequality, high unemployment, and lower average income tend to have significantly higher levels of crime. In addition to resource deprivation, areas with higher geographic mobility, the rapid turnover in population, are also more crime prone. In such transitional areas, residents are less likely to feel any long-term commitment to the community and are less likely to be involved in community activities. This increases the potential for serious crime. In recognizing geographic differences in crime rates, we also draw attention to important differences in exposure to crime. Residents of such resource-deprived and transitional neighborhoods have significantly greater risk of victimization. Likewise, property and businesses in these communities are also more likely to experience crime. Consequently, residents and businesses in deprived and transitional neighborhoods are more likely to bear the costs of crime.
In addition to geographic risk factors, there are also numerous social attributes that increase vulnerability to crime. Age is consistently related to criminal victimization, with teenagers and early adults having comparatively high risk of victimization. Particularly with respect to violent crime, risk of victimization increases sharply into late adolescence and then declines monotonically with increasing age. Adolescents have victimization rates that are typically three to five times greater than older adults do.
Another factor that influences victimization risk is socioeconomic status. In some research, unemployed people are considerably more likely to suffer personal and violent victimization. Other research shows that low occupational status and low personal or family income also increase risk of victimization. Although often closely related to socioeconomic and geographic effects, there is also evidence of racial susceptibility to crime: African Americans have much higher levels of victimization, particularly for serious violent crime. Finally, while gender differences in victimization are complicated and varied, women are overwhelmingly susceptible to sexual victimization that has some of the most significant and long-term costs.
While this research paper has discussed the various factors that increase risks of victimization separately, it is important to recognize that these risk factors have compounding effects. That is, young urban males, particularly minority males living in deprived and transitional neighborhoods, have dramatically higher risk of victimization, particularly for serious violent crime. The tremendous costs that can stem from crime are typically borne by those who already lack social and financial resources. Thus, crime and its ensuing costs may play a significant role in the reproduction of social inequalities.
Directions for Future Research
A potentially important area for future research is the possibility of long-term socioeconomic deficits. Estimates of the costs of crime to victims generally focus on relatively short-term costs. Costs associated with property loss, property damage, physical injury, and psychological distress are all costs that incur during the victimization event itself or during the short period after the crime. Previous estimates have yet to fully consider long-term socioeconomic detriments stemming from violent victimization. Although this possibility is acknowledged, previous work has yet to articulate fully the mechanisms by which criminal victimization has long-term monetary costs and to incorporate such considerations in estimates of the overall costs of criminal violence.
Recent work in life-course sociology and human development provides a framework for estimating such costs. In general, life-course researchers attempt to identify the connections between disparate life-course events by demonstrating the effects of earlier events on later life-course outcomes. Life-course researchers delineate the complex ways in which lifecourse experiences influence expectations and aspirations that shape the direction of life-course development. From this perspective, we might anticipate that the crime-related psychological distress, even if short-lived, has the potential to disrupt processes of educational and occupational attainment, particularly when experienced during the early stages of the life course. Crime victimization in adolescence may reduce perceived self-efficacy with the consequence of lower educational attainment, higher unemployment, and poorer occupational status. Ultimately, diminished educational and occupational attainment should result in significantly lower income in later adult life. Through the linking of experiences with crime victimization, their psychological consequences, and life course paths of socioeconomic attainment, further and potentially substantial costs of crime seem likely. Exploring such long-term costs is an important avenue of future work.
Research on the costs of crime is important for understanding crime as a social problem. It also has the potential to influence policymaking on issues of crime and justice. First and foremost, it indicates the significance of crime as a social problem. Without even considering costs associated with individual and societal responses to crime, crime undermines quality of life and has significant personal costs for those most affected. Second, this work suggests an important avenue of social policy: minimizing both the direct and indirect costs of crime. Although prevention is clearly the most potent avenue for minimizing costs, other strategies that attack the various ways in which crime-related costs are incurred are also important. Third, this work provides an important means of evaluating current crime prevention and criminal justice practices. Estimates of the costs of crime can be compared with the costs of particular criminal justice initiatives and policies to assess the overall efficiency of criminal justice responses. With the increased expenditure on police and prisons in the late twentieth century, such comparisons seem both timely and important. Ultimately, estimating the costs of crime should play a key role in the development of effective social policy to reduce crime.
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