8:04 PM EST, December 22, 2012
When most people think of crime’s cost they immediately think of stolen valuables, cops on the street and the ever spiraling fortune spent keeping large portions of the population behind bars.
But what about the burden of locking and unlocking your front door?
Centre College Economics Professor David Anderson took into account both direct and less obvious financial hardships caused by criminal activity in his attempt to put a price tag on crime in the United States each year. His estimate was staggering: $1.7 trillion.
Anderson, who has studied the economic impact of criminal activity in the past, published his article, “The Cost of Crime” earlier this year in the journal Foundations and Trends in Microeconomics. Although many reports are produced each year on what is spent for specific crime-related purposes, such as law enforcement or the court system, Anderson’s may be the most comprehensive estimate of the burden for the country as a whole.
Anderson notes the country’s expenditures on policing, corrections and the criminal justice system, for which America annually spends in excess of $113 billion, $81 and $42 billion respectively. He also cites figures that show the number of individual victimizations declined dramatically between 1995 and 2010, going from 40 million to 18.7 million.
Despite the drop in cases, Anderson found crime’s toll is often less straightforward than the amount spent on prevention or punishment. That includes everything from the loss of productive time a criminal spends planning a caper to what the value of time lost to locking and unlocking doors — or sophisticated safes, depending on your level of worry.
“The indirect costs of crime include the opportunity cost of time lost to criminal activities, incarceration, crime prevention and recovery after victimization,” Anderson writes. “The threat of crime elicits private expenditures on deterrents such as locks, safety lighting, security fences, alarm systems, anti-virus software programs and armored car services.”
Anderson’s findings also indicate some of the burden may have shifted.
He writes that crime-induced production, which are expenses that would be unnecessary in the absence of crime or the threat of crime, are about $646 billion a year. Of that, $300 billion was spent on private efforts to prevent crime.
The booming personal security industry is an indicator of what Anderson called the “environment of crime.” While the modern lament about how “no one used to lock their doors at night” in small towns across the country is one indicator of that environment, the $36 billion people spend each year on home security systems is even more striking.
The variety of crime, and the resulting necessity to stop it, were also factored in to Anderson’s estimate.
Adoption of computer systems and the ascendency of the internet have created an entire new avenue for criminals and a market for preventative software. Anderson includes figures from an FBI survey that found businesses alone spend $78.1 billion each year on computer viruses and computer security incidents.
While local or national trends may have a more sublet effect, some crimes have a sudden impact on the individual and collective psyche of Americans.
Around the time of the October vice presidential debate on Centre’s campus, Anderson had only to look out his window to see the scale of crime prevention measures brought on in large part by the 2001 terrorist attacks on the World Trade Center.
The Newtown, Conn., school massacre last week served as heart rending example of the how even distant acts impact all parts of the country.
Anderson said events like what happened in Newtown, while uncommon, consume both time and mental and emotional energy on a broad scale.
Sensational crimes that hold the national attention also contribute to what Anderson calls the environment of crime. In the case of Newtown and other school shootings, a relatively safe place becomes one fraught with potential dangers people will try to mitigate with costly solutions.
Just as the costs of criminal activity are more diverse than theft prevention or paying for bricks and bars, Anderson believes the country as a whole needs to look at varied ways of reducing the overall impact on society.
Anderson would like to see schools create anger management lessons and other types of instruction that nurture emotional development included in curriculums. He pointed to the recurrence of costly white collar cases as evidence of the need for more ethics education in classrooms.
“I think it is important to have discussions of how you deal with anger, but also the repercussions of criminal activity,” Anderson said. “Even if it is just spray painting a building or some other kind of vandalism, there are so many costs associated with that and it is part of creating an environment of crime. I also think there is value and real importance in having people think, from a young age, about what is right and wrong.”
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