New research shows that crime costs in U.S. have passed trillion-dollar mark
DANVILLE, KY-- In a study recently published by the prestigious University of Chicago Journal of Law and Economics, Centre College economist David Anderson says that crime may have become the single most expensive -- and wasteful -- aspect of life in America.
U.S. citizens, businesses and governments now are burdened with an aggregate cost of crime that has passed the trillion-dollar mark. From an individual perspective, Anderson says every man, woman and child in this country is burdened each year with about $4,100 in crime costs, whether the person has been directly victimized or not.
The figures represent a tragic level of waste, says Anderson, because the money is not enhancing the productivity of American businesses nor improving the quality of life for private citizens.
The economist also contends that many current approaches to reducing or deterring crime are ineffective. In a series of interviews with prisoners at a medium-security facility, Anderson learned that most of the inmates were unaware of and unaffected by certain types of crime prevention measures.
Anderson concludes that the U.S. should take a more serious look at cost-effective strategies for reducing crime. Among his suggestions: strategic planning in local communities, enhanced law enforcement at the local level, legal reform, education and the development of ethics curricula for elementary, middle and high school students.
Anderson arrived at the trillion-dollar figure after five years of intense research focused on the hidden costs of crime. He began with core figures about annual costs of prosecuting and incarcerating criminals, then doggedly searched for figures about the co-called "hidden" costs of crime: lost wages, personal anguish, expenditures on personal protection devices.
What he eventually learned, says Anderson, confirmed what he suspected: "Our past understanding of the burden of crime revealed only the tip of the iceberg."
While Anderson's article is written in scholarly language for a worldwide network of economists, he can explain the basic precepts by describing a common American crime -- auto theft. When an auto is stolen, says Anderson, the obvious cost is the value of the vehicle itself. Inevitably, though, the hidden costs pile up: wages lost when a family member misses work to file a police report, the cost of police time devoted to investigating the crime, the cost of court proceedings and incarceration if the criminal is apprehended and then convicted. Yet another cost: the family will be more likely to purchase theft-protection devices for future vehicles.
The end result: an auto theft that appears to have an impact of $20,000 on a family can easily cast a burden of $40,000 to $100,000 on society. The burden is shared by everyone in the form of higher insurance costs, higher taxes and a general loss in quality of life.
Anderson cites examples in his article that cut through all areas of American life. Libraries are spending about $28 million per year on theft-detection systems. Medical care for victims of violent crime costs about $2.5 billion per year. Businesses lose about $7.2 billion per year to shoplifters.
Other outcomes of Anderson's research:
"¢ Every incarcerated prisoner represents a lost opportunity for American businesses. The average prisoner might reasonably expect to earn about $23,200 per year in wages. In his prisoner interviews, Anderson concluded that many of the law-breakers had even greater potential because they are risk-takers who, as law-abiding citizens, might have some of the same qualities as entrepreneurs.
"¢"¢Americans have experienced a dramatic loss in quality of life because of crime, relating directly to a fear of being victimized and agony for those who have become crime victims.
"¢"¢Americans spend an remarkable amount of time dealing with locks, keys, and security devices because of their fear of crime.
Contacts:
Centre College news service: Patsi Trollinger, 606-238-5719 ([email protected])
Prof. Anderson (currently on sabbatical from Centre, pursuing research in North Carolina), telephone 704-892-2245. ([email protected])
To obtain full text of article:
"¢"¢Request as an Email attachment from (Prof. Anderson)
or download from: http://papers.ssrn.com/paper.taf?ABSTRACTID=147911
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