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Costs and Benefits of Preventing Crime: Economic Costs and Benefits
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Preventing Crime: Economic
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What Crimes Cost

Victims of crime suffer tremendous losses as a result of criminal victimization. Annual losses of $450 million are associated with major violent crime victimizations, and approximately $40 billion is attributed to monetary losses from fraud and other economic crimes. Financial measures of losses attributed to crime victimization are only crude tools used to assess the true damages suffered by victims in the hope of somehow lessening the impact of the crime. The contribution of such a financial analysis aids in both impressing upon the criminal justice system the severity of the victimization and gauging what measure of financial recovery might help victims in addressing their losses resulting from crime. It must be emphasized, however, that money damages alone are never a complete measure of the harm caused by crime, but just a useful tool in addressing certain aspects of the aftermath of criminal victimization.

The losses suffered by victims range from direct out-of-pocket expenses, such as unreimbursed medical costs and lost wages, to costs incidental to the crime and the victim's participation inthe criminal justice system, such as travel and related expenses. In addition to these more immediate and short-term costs of crime, victims often incur long-term costs due to the need for ongoing mental health support and/or support as a result of permanent disabilities. In addition to these more tangible types of losses, victims' losses can also be in areas termed "intangible" such as pain and suffering or the loss of the enjoyment of life and other such losses.

Accurate and complete documentation of financial losses are required in the pursuit of financial remedies for victims to ensure valid recoveries for victim losses. This is true regardless of the form or forms of financial recovery victims will seek or be eligible to obtain (i.e., any combination of civil litigation recovery, restitution, or compensation). Service providers can provide critical assistance to victims in helping them acquire and maintain these records, or, at least, by providing victims with guidelines about the types of documentation that are needed to depict their out-of-pocket and projected expenses for the future.

Victim Costs and Consequences: A New Look (1996) documents the results of a multi-year multidisciplinary research effort to estimate the costs and consequences of personal crime for Americans. Personal crime is estimated to cost $105 billion annually in medical costs, lost earnings, and public program costs related to victim assistance. These tangible losses do not account for the full impact of crime on victims, however, because they ignore pain, suffering, and lost quality of life. Including pain, suffering, and the reduced quality of life increases the cost of crime to victims to an estimated $450 billion annually. Violent crime (including drunk driving and arson) accounts for $426 billion of this total, property crime $24 billion. These estimates exclude several crimes that were not included in this study but that also have large impacts, notably many forms of white collar crime (including personal fraud) and drug crimes.

Crime victims in 1992 lost $17.6 billion in direct costs, according to the National Crime Victimization Survey (NCVS). These costs included losses from property theft or damage, cash losses, medical expenses, and amount of pay lost because of injury or activities related to the crime (Klaus, Patsy A. 1994. The Costs of Crime to Victims. Washington, DC: U.S. Department of Justice, Bureau of Justice Statistics. 1).

In 1992, alcohol and drug abuse caused an estimated 25 to 30 percent of violent crimes and property crimes (depending on the specific type of crime). Direct costs of alcohol- and drug-related crimes, including police and private protection services, adjudication, corrections, and property destruction, were estimated at $24.3 billion. Another $45.6 billion was incurred as lost productivity among crime's victims, incarcerated offenders, and persons who engage in crime careers rather than the legitimate labor market. Nearly 600,000 person-years were served because of alcohol or drug abuse-related offenses (a loss of $23.5 billion in potential productivity) and another 600,000 persons withdrew from the legitimate labor market primarily to pursue income-generating crime and/or drug dealing (a loss of $19.2 billion in potential legitimate productivity). See: The Economic Costs of Alcohol and Drug Abuse in the United States from the National Institute on Drug Abuse and the National Institute on Alcohol Abuse and Alcoholism.

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Last Updated: May 5, 2011