Modelling the Cost of Crime

Abstract

A growing literature attempts to estimate the victim costs of crime. Three approaches to modelling the cost of crime are examined in this chapter: surveys of victims, extrapolation from jury awards, and the impact of crime on property values. The first two methods attempt to measure the victim costs associated with specific crimes while the third is based on the willingness to pay for a reduced probability of victimisation. Section I summarises these three approaches to the cost of crime. Economics is oriented towards marginal analysis, which leads economists to model the cost of crime in terms of a revealed preference for small improvements in public safety. In Section II we present an empirical model of the willingness to pay for increased public safety which incorporates estimates of the victim costs of crime rather than a simple enumeration of the number of reported offences. Concluding comments follow in Section III.KeywordsHousing MarketViolent CrimeBlock GroupContingent ValuationNeighbourhood CharacteristicThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.