The cost of crime to society: New crime-specific estimates for policy and program evaluation

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Abstract

Estimating the cost to society of individual crimes is essential to the economic evaluation of many social programs, such as substance abuse treatment and community policing. A review of the crime-costing literature reveals multiple sources, including published articles and government reports, which collectively represent the alternative approaches for estimating the economic losses associated with criminal activity. Many of these sources are based upon data that are more than 10 years old, indicating a need for updated figures. This study presents a comprehensive methodology for calculating the cost to society of various criminal acts. Tangible and intangible losses are estimated using the most current data available. The selected approach, which incorporates both the cost-of-illness and the jury compensation methods, yields cost estimates for more than a dozen major crime categories, including several categories not found in previous studies. Updated crime cost estimates can help government agencies and other organizations execute more prudent policy evaluations, particularly benefit–cost analyses of substance abuse treatment or other interventions that reduce crime.

Introduction

Crime generates substantial costs to society at individual, community, and national levels. In the United States, more than 23 million criminal offenses were committed in 2007, resulting in approximately $15 billion in economic losses to the victims and $179 billion in government expenditures on police protection, judicial and legal activities, and corrections (U.S. Department of Justice, 2004a, U.S. Department of Justice, 2007a, U.S. Department of Justice, 2008). Programs that directly or indirectly prevent crime can therefore generate substantial economic benefits by reducing crime-related costs incurred by victims, communities, and the criminal justice system.

Substance abuse treatment is one example of an intervention that not only has the potential to improve individual lives through recovery from addiction but also may generate significant economic benefits to society by reducing addiction-related crime. Numerous studies have documented the strong relationship between substance use and crime, and although causality between the two has not been conclusively established, U.S. statistics show that more than 50% of state and federal inmates used drugs in the month prior to committing the offense for which they were incarcerated and that more than a quarter of all offenders were using drugs at the time of their offense (U.S. Department of Justice, 2006, Miller et al., 2006). Most substance abuse treatment evaluations use standard assessment instruments such as the Addiction Severity Index (ASI) (McLellan et al., 1992) and Global Appraisal of Individual Needs (GAIN) (Dennis et al., 2006), which include measures of criminal activity or legal problems. Economists can therefore use these criminal activity measures to estimate the dollar benefits of substance abuse interventions if they have access to current and reliable unit cost estimates for individual crimes. Many of the crime cost estimates currently available to analysts are more than 10 years old and were generated from even older data (e.g., Rajkumar and French, 1997, Cohen, 1988, Cohen et al., 1994, Miller et al., 1996).

As presented in numerous prior studies, the cost of crime to society can be divided into four fundamental components:

  • Victim costs: Direct economic losses suffered by crime victims, including medical care costs, lost earnings, and property loss/damage.

  • Criminal justice system costs: Local, state, and federal government funds spent on police protection, legal and adjudication services, and corrections programs, including incarceration.

  • Crime career costs: Opportunity costs associated with the criminal's choice to engage in illegal rather than legal and productive activities.

  • Intangible costs: Indirect losses suffered by crime victims, including pain and suffering, decreased quality of life, and psychological distress.

Measuring losses across these four components provides an estimate of the economic cost of individual crimes. The broad societal perspective is appropriate for economic analysis and program evaluation because more narrow perspectives (e.g., crime victim, criminal justice agency, community organization) apply to specific stakeholders or agendas. For comparability with previous research, this study uses established methods while incorporating the most current sources of crime and cost data to produce an expanded list of unit cost estimates for 13 criminal offenses, including several crime categories not found in previous studies. These new crime cost estimates are necessary inputs for full economic evaluations of addiction treatment, neighborhood policing, welfare reform programs, and any other programs or interventions with a crime prevention component.

Section snippets

Literature review

Previous studies estimating the economic impact of criminal activity vary greatly in their perspective, methods, measures, and data sources. The literature includes peer-reviewed publications, as well as unpublished manuscripts and government reports.

Data

The availability of quality data sources plays a fundamental role in developing and implementing a comprehensive estimation strategy. Table 2 presents the list of offense categories, definitions, and data sources for the 13 crimes examined in this study. Data on most high-profile crime categories are available from the NCVS. Using a stratified, multi-stage cluster sample of U.S. residents aged 12 or older, the NCVS covers crimes against individuals and households, regardless of whether those

Methods

The analysis follows a two-pronged approach that employs cost-of-illness and jury compensation methods to estimate both the tangible and intangible costs of crime (Rajkumar and French, 1997). The cost-of-illness approach estimates the tangible costs of crime, including lost productivity for the perpetrator and short-term medical expenses, lost earnings, and property damage/loss for the victim.

Measuring the intangible costs of crime requires a different approach. As described earlier, Cohen's

Results

Table 3 presents estimates for the per-offense tangible costs of crime in 2008 dollars across 13 offense types. The three main components of tangible costs are victim costs, criminal justice system costs, and crime career costs. Predatory crimes generated the highest per-offense cost to society with $1.28 million per murder, $41,247 per rape/sexual assault, $21,398 per robbery, and $19,537 per aggravated assault. The property crimes of motor vehicle theft, arson, household burglary, and

Discussion

The costing methodology outlined in this paper has advantages over other approaches because it employs standardized techniques and provides a comprehensive perspective. Dividing estimates of the total cost of crime into tangible and intangible components incorporates a variety of perspectives (e.g., victim, criminal justice system, taxpayer, perpetrator). Another unique aspect of this study is the broad list of criminal offenses. An extensive list of crimes facilitates the use of these

Conclusion

This study presents the most current estimates of the societal cost of 13 individual criminal offenses, using the most recently available national crime statistics. Such estimates are crucial for evaluating the economic impact of programs that directly or indirectly reduce crime. The estimates are disaggregated to show not only the cost of specific components of crime (victim costs, criminal justice system costs, productivity losses) but also their tangible and intangible (pain/suffering and

Role of funding source

Financial assistance for this project was provided by the National Institute on Drug Abuse (R01 DA018645; K01 DA13962). NIDA had no further role in study design; in the collection, analysis and interpretation of data; in the writing of the report; or in the decision to submit the paper for publication.

Contributors

All of the authors have participated in the conception and design of the study, and/or the analysis and interpretation of the data. Drs. McCollister and French designed the study, analyzed the data, and wrote the paper. Dr. Fang assisted in data collection and contributed to the analysis and interpretation of results. In addition, all have assisted in and approved the revision of the manuscript.

Conflict of interest

The authors declare that they have no financial or other relationships that might lead to a conflict of interest.

Acknowledgements

We are grateful to Dr. Ted Miller for his assistance in obtaining offense-specific injury data as well as updated estimates of medical costs and productivity losses. We are also grateful to David Reznik, Elias Bitar, Rosemary Kenney, and Lauren Tapsell for research assistance, and to William Russell and Carmen Martinez for editorial assistance.

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