The Cost of Crime to Society: New Crime-Specific Estimates for Policy and Program Evaluation

1. The Cost of Crime to Society: New Crime-Specific Estimates for Policy and Program Evaluation Kathryn E. McCollister, Ph.D. University of Miami

2. Introduction Assessing costs of criminal activity is important for economic evaluation of addiction treatment and crime prevention programs Existing crime cost resources are few in number and outdated Methods inconsistent; disparate crime and cost data sources Updated crime cost estimates needed to estimate economic benefits of reduced criminal activity Inform policy about prudent resource allocation decisions for programs addressing addiction, crime prevention, and private security

3. Background Previous efforts to estimate impact of crime U.S. Department of Justice: criminal activity data Bureau of Justice Statistics: annual report �Criminal Victimization in the United States� Department of Health and Human Services: �The Economic Costs to Society of Alcohol and Drug Abuse and Mental Illness� Mark Cohen (Vanderbilt University), Ted Miller (National Public Services Research Inst.) Anderson (1999); Wright & Litaker (1996); Bartley (2000); MacMillan (2000)

4. Background (cont.) Rajkumar and French (1997) Template for current study First study to calculate cost per offense across broad range of crime categories Estimated tangible and intangible costs of crime Applied crime cost estimates to TOPS data to illustrate utility of estimates in conducting benefit-cost analysis

5. Crime and Cost Data Sources 2002 National Crime Victimization Survey (NCVS) FBI�s Uniform Crime Reports (UCR) and National Incident-Based Reporting System (NIBRS) National Fire Incident Reporting System (NFIRS) and National Fire Protection Association (NFPA) BJS reports Current Population Survey National Center for Health Statistics Miller et al. (1996) Jury Verdict Research (JVR)

6. Methods for Estimating Cost of Crime to Society Combination of cost-of-illness and jury compensation methods used to estimate total cost of crime Cost-of-illness: tangible costs associated with lost productivity, short-term medical expenses, property damage/loss Jury compensation: jury award data from personal injury trials used to estimate value of pain and suffering

7. Methods: Tangible Costs Tangible Costs Victim costs - Direct costs: medical expenses, cash losses, property theft/damage, lost wages Risk-of-homicide - Probability certain offense leads to homicide times mean present value of lifetime earnings Mental health care costs - Cost estimates of post-victimization counseling and related services inflated to 2004 dollars from Cohen and Miller (1998)

8. Tangible Costs (cont.) Criminal Justice System Costs Police protection Legal and adjudication Corrections Crime career costs Productivity losses incurred by perpetrator

9. Methods: Intangible Costs Pain and suffering - Calculated for 3 crime categories Rape/sexual assault, robbery, aggravated assault - Injury data and type of medical treatment received (Miller et al. 1996) Gunshot wounds, broken bones, bruises, etc. Overnight hospital stay, home care, other medical care Lost wages and victims� medical expenses reported by treatment, per injury/offense (Specials) - Value of specials subtracted from jury award data (JVR, 2004) to provide �pain and suffering� estimates

10. Intangible Costs (cont.) Corrected Risk-of-Homicide - Corrected to consider intangible costs associated with murder - Based on Viscusi & Aldy (2003) value of a statistical life ($6.7 million) - Probability of homicide for each offense multiplied by new value of life

11. Total Cost of Crime Sum of tangible and intangible costs of crime Subtracted original risk-of-homicide from measures with corrected risk-of-homicide Categories with no pain and suffering or corrected risk-of-homicide costs (no intangible cost) have total cost = tangible cost Intangible costs greatly increase the per-offense societal cost of rape, aggravated assault, and robbery

12. Total Cost of Crime (cont.)

13. Discussion Costing methodology presented here provides comprehensive perspective on crime�s impact on society Intangible and tangible cost estimates represents different points of view (victim, perpetrator, criminal justice system) Broad list of criminal offenses estimated

14. Limitations Challenges persist Lack of uniform data sources Missing data Existing studies fragmented, inconsistent Difficulty quantifying actual number of offenses with some crimes (e.g., drug law violations) Estimates exclude value of psychological injury Value of property loss: true cost or transfer of income?

15. Conclusions Understanding economic impact of crime aids policy makers in allocating crime fighting resources Value of criminal activity important for understanding economic benefits of addiction treatment and crime control strategies Crime cost estimates show how even modest reductions in certain types of crime can generate substantial economic benefits Ideally update estimates every 5 years

16. References Anderson, D. A. (1999). The aggregate burden of crime. J. Law Econ. 42: 611-637. Bartley, W. A. (2000). Valuation of specific crime rates. National Criminal Justice Reference Service: Vanderbilt University School of Economics. Cohen, M. A., and Miller, T. R. (1998). The cost of mental health care for victims of crime. J. Interpers. Violence 13: 93-110. Macmillan, R. (2000). Adolescent victimization and income deficits in adulthood: rethinking the costs of criminal violence from a life-course perspective. Criminology 38: 553-580. Miller, T. R., Cohen, M. A., and Wiersema, B. (1996). Victim costs and consequences: a new look. National Institute of Justice Research Report, Washington, D.C. Rajkumar, A. S., and French, M. T. (1997). Drug abuse, crime costs, and the economic benefits of treatment. J. Quant. Criminol. 13(3): 291-323. Wright, M. S., and Litaker, D. (1996). Childhood victims of violence: hospital utilization by children with intentional injuries. Arch. Pediat. Adol. Med. 150: 415-420.