The Role of the Cost‐of‐Crime Literature in Bridging the Gap Between Social Science Research and Policy Making

• Date: 01 November 2015
• Published date: 01 November 2015
• Author: Patricio Domínguez,Steven Raphael
• DOI: http://doi.org/10.1111/1745-9133.12148

RESEARCH ARTICLE

ROLE OF THE COST-OF-CRIME

LITERATURE

The Role of the Cost-of-Crime Literature in

Bridging the Gap Between Social Science

Research and Policy Making

Potentials and Limitations

Patricio Dom´

ınguez

Steven Raphael

University of California, Berkeley

Research Summary

In this article, we review the theoretical paradigmunderlying cost–benefit analysis and

address some of the critiques of this framework that have arisen within criminal justice

circles and other policy areas. We also review existing studies devoted to estimating the

costs of specific crimes. We offer a brief discussion categorizing the alternative costs of

crime and the various methodological approaches taken (hedonic analysis, contingent

valuation, and accounting methods), with an explicit discussion of the relative strengths

and weaknesses of each approach and debates within the economics profession pertaining

to these methodologies. We argue that cost considerations broadly defined should be of

central importance in criminal justice policy debates. However, we also highlight the

potential for cost-consideration and important equity criteria to come into conflict.

Policy Implications

Policy makers should consider careful cost–benefit analysis as an important criterion in

criminal justice policy. Givensome f eaturesof criminal justice policy choices such as the

unequal distribution of the costs of criminal victimization, anti-crime enforcement,

We thank Daniel Baker, Daniel Nagin, Robert MacCoun, and Jesse Rothstein for helpful discussion and

feedback on this project. Direct correspondence to Patricio Dom´

ınguez, Goldman School of Public Policy,

University of California, Berkeley, 2607 Hearst Avenue, Berkeley, CA 94720-7320 (e-mail: pdominguez@

berkeley.edu).

DOI:10.1111/1745-9133.12148 C2015 American Society of Criminology 589

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Research Article Role of the Cost-of-Crime Literature

and the potential for perceived illegitimacy of the criminal justice system to undermine

various public institutions, we argue that equity considerations also deserve careful

attention. In practice, we place greater confidence in the use of cost-of-crime estimates

to judge the relative effectiveness of alternative interventions, and we are cautious

regarding policy prescriptions emanating from benefit–cost ratios that are marginally

greater than one.

During the past three decades, considerable research effort has been devoted to

articulating and measuring the various pathways through which crime and our

public and private responses to crime impact overall the well-being of society. An

important substrata of this research has focused on placing a monetary value on the social

cost of criminal victimization. These efforts often have aimed to generate separate figures

for different crime types with the goal of generating a common metric against which the

relative severity of alternative criminal incidents can be judged.

Estimates of the costs of criminal victimization play an important role in bridging

the gap between basic social science research on criminal justice interventions and policy

analysis. By monetizing and rendering commensurable crimes of varying severity, these

estimates facilitate an analysis of the degree to which the benefits of a given proposal exceed

the costs broadly defined. Equally as important, these estimates facilitate a comparative

analysis of alternative policy tools, permitting estimates of the “bang-per-buck” across

policy interventions and assessments of the efficiency of a given pattern of deployment of

public resources.

Of course, there are limitations to this conceptual framework for public choice and, by

extension, to the utility of the costs-of-crime literature in informing and guiding criminal

justice policy.To start, cost–benefit analysis and cost-effectiveness analysis provide a specific

weighting (or social accounting) of the relative welfare of alternative groups in society that

often conflicts with widely held beliefs regarding fairness and equity. This is a direct result

of the use of money as the common metric used to place various benefits and costs on a

common footing. Responsible analysis requires cognizance of this fact and a careful parallel

analysis of the equity implications of policy alternatives.

There are also important qualifications regarding the measurement of the costs of

crime and suspicion that current methods overestimate these costs. For example, pain-and-

suffering estimates based on observed jury awards reflect judgments made by jurors that

have no consequences for the jurors themselves. Damage assessments are imposed on a third

party; the jury effectively spends someone else’s money. Similar concerns are often raised

regarding estimates of willingness to pay to avoid victimization via surveys querying about

hypothetical referenda. By design, nothing is at stake for the respondent in answering a

hypothetical question, although careful contingent valuation studies have made great efforts

to articulate and make salient the tax consequences of the scenario under consideration.

590 Criminology & Public Policy

Dom´

ınguez and Raphael

Both examples illustrate how cost-of-crime estimates are often based on assessments that

are divorced from personal budget considerations.

In what follows, we argue that the cost–benefit framework and economic approach

to public choice should play an increasingly important role in criminal justice policy and

that the body of research estimating specific costs of crime should figure prominently in

policy analysis and public choice in the criminal justice domain. Such analysis is already

quite important and influential in other policy domains, in which risk of injury and lives

lost are influenced by policy choices, such as occupational safety and health, environmental

regulation, and transportation safety. The increasing emphasis on cost–benefit analyses and

the search for policy tools with an “evidence base” brings criminal justice policy into this

fold.

However, we do not support the proposition that policy choices should strictly adhere

to and be determined solely by the results of cost–benefit calculations. Cost–benefit anal-

ysis alone often fails to consider adequately the equity implications of policy alternatives.

Equity is an especially important criterion in criminal justice policy, and perhaps it is a

more important criterion relative to other policy domains. The burdens of criminal justice

enforcement are disproportionately borne by the poor and the marginalized, and often they

can exacerbate existing societal divides, such as inter-racial economic disparities or the rela-

tive deprivation of individuals with severe mental illness. Moreover, an unequally distributed

burden of the impact of criminal justice enforcement may delegitimize law enforcement,

the criminal justice system more broadly, and government in general in specific commu-

nities. Inadequate consideration of equity, fairness, proportionality, procedural justice, and

disparate impact may ultimately serve to undermine and offset the value of crime-control

benefits achieved through specific policy strategies.

Moreover, we have more confidence in the ability of cost-of-crime estimates to gauge

the relative severity of alternative crime types than we do in the absolute magnitudes

of the individual cost point estimates. Having a gauge of relative severity that renders

alternative crime types commensurable greatly facilitates “cost-effectiveness” analysis of the

relative efficacy of alternative uses of public funds. Irrespective of whether cost estimates for

specific crimes are too high or low, a solid and reliable relativeordering permits the ranking

of policy alternatives that have differential effects on different crime types. Conclusions

regarding whether a specific policy has a cost–benefit ratio in excess of one, however,

requires confidence in the precision and unbiasedness of the costs-of-crime estimates.1

We begin by discussing the theoretical paradigm underlying cost–benefit analysis and

address some of the critiques of this framework that have arisen within criminal justice

circles and other policy areas. We argue that cost considerations broadly defined are, in the

language of Adler and Posner (1999), “morallyrelevant” and certainly an important criteria

1. Similarly, this also requires confidence in the precision and unbiasedness of the underlying estimates of

the intervention on crime.

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