Estimating Costs of Crime

Abstract

This chapter reviews the theory, methods, and evidence on estimating the costs of crime. Criminal justice policy analysts increasingly want to know more about an intervention or project: not only “does it work?” but also “is it cost effective?” or “does it contribute positive net benefits?” To answer many questions of this kind, requires estimates of the costs of different types of crime so that the benefits from a crime reduction policy can be assessed.This chapter outlines how such estimates are normally made by economists and some of the alternative methods that are sometimes appropriate. It gives examples, including a comparison of costs across countries for a similar offence type. There are many different types of costs of crime estimates in the literature – including many that are “incomplete” or poorly founded.Part of our purpose is to help users become informed about the different approaches and their limitations. The chapter is primarily limited to estimates of the cost of traditional “street crime,” and largely ignores white collar, corporate, and regulatory crimes. However, many of the techniques discussed are also appropriate to estimating the costs of these other types of crimes.