Crime Costs 3.2% of U.S. Gross Domestic Product: Paper

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Crime accounts for 3.2 percent of the Gross Domestic Product, representing more than $1,750 for every American in 2017 — more than what the U.S. spends on national defense, according to a new study.

The figure represents the toll taken by 121 million crimes in 2017, the most recent year used by researchers for their study.

They estimated “direct monetary costs of crime” at $625 billion, but when additional costs such as estimated quality of life and work days lost, the figure increased to $2.1 trillion — or nearly 10 percent of GDP.

“The costs of crime to victims and society far exceed the value of goods stolen or property damaged,” the authors said.

“Violent crime victimization results in medical costs, mental health costs, work losses, and less tangible quality of life losses.”

The U.S. spent $590 billion on military expenditures in 2017, and $450 billion on all social welfare programs.  Crime-related medical and mental health care expenditures totaled about $90 billion, representing about 2.5 percent of U.S. health care expenditures.

Violent crime accounted for 80 percent of the total. That includes sexual violence, physical assault/robbery, and child maltreatment.

The estimates exclude the additional costs of preventing and avoiding crime such as enhanced lighting and burglar alarms. They also exclude crimes against businesses and most white-collar and corporate offenses.

The researchers estimated the total cost based on analyzing the FBI’s Uniform Crime Reports (UCR), National Vital Statistics (2017), the National Criminal Victimization Survey (NCVS) from the Bureau of Justice Statistics, among other databases and surveys.

The estimated costs of crime were broken down into multiple categories: medical, mental health, work, property loss, public services (Police, Fire Departments, EMS, Victims Services, Courts, etc.) adjudication and sanctioning, and perpetrator work loss.

“Unless otherwise noted, all costs are estimated on the basis of the incident – regardless of when costs occur and whether or not a crime results in arrest,” the paper said.

“Victim costs are based on the present value of lifetime costs to victims for offenses incurred in 2017.”

Homicides were the most “costly” crime, with 19,510 recorded murders in 2017, at an estimated total cost of $155,696,000, according to the authors.

To find this number, they used the “willingness to pay” method which is what’s “mandated for use in analyses of Federal regulations that save lives.”

“This widely accepted approach infers how much people are willing to pay to save their lives from what they pay for small changes in their chance of being killed or injured,” the authors explain.

This willingness-to-pay metric was used in a similar 2010 study, where the author, sociologist Matt DeLisi, cited murders costing around $12 million per murder.

“That number sounds like a lot, but people radically change their behavior in response to violent crime,” DeLisi told The Slate.

“Think about the D.C. sniper case, for instance. When that happened, two people on a rampage changed the behavior of millions of people. It was not just the cost of the state spending thousands of dollars on extra patrols and traffic stops, and the cost of the 10 left dead.”

The ten most frequently perpetrated crimes in 2017 were:  fraud (including identity theft), assault, vandalism, larceny, rape, impaired driving (non-crash-involved), sexual assault (excluding rape), burglary, child maltreatment, and intimate partner violence.

Drug possession/sale, assaults, larceny, child maltreatment, and impaired driving led to the largest number of arrests.

According to the authors, the crime bill could be cut by measures aimed at crime prevention.

“Dozens of cost-beneficial crime prevention interventions exist,” the paper said. “Given the size of the nation’s crime bill, providing adequate funding to implement them seems a priority.”

The authors of this study were: Ted R. Miller of the National Public Services Research Institute; Mark A. Cohen of the Vanderbilt University Strategy and Business Economics, Vanderbilt University Law School, and Resources for the Future Fellow; David I. Swedler of the Pacific Institute for Research and Evaluation (PIRE); Bina Ali of the Pacific Institute for Research and Evaluation (PIRE); and Delia V. Hendrie, of the School of Public Health in Curtin University.

The full study can be accessed here.

This summary was prepared by TCR staff writer Andrea Cipriano.

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