Table of Contents

Handbook on the Economics of Crime

Handbook on the Economics of Crime

Elgar original reference

Edited by Bruce L. Benson and Paul R. Zimmerman

While few economists analyzed criminal behaviour and the criminal justice process before Gary Becker’s seminal 1968 paper, an enormous body of economic research on crime has since been produced. This insightful and comprehensive Handbook reviews and extends much of this important resulting research.

Chapter 11: The Economic Costs of Criminal Activity: A Discussion of Methodological Approaches and Empirical Estimates

Allen K. Lynch

Subjects: economics and finance, public choice theory, public sector economics, politics and public policy, public choice


Allen K. Lynch The foregoing reflections authorize me to assert, that crimes are only to be measured by the injury done to society. (Beccaria, 1764) INTRODUCTION Criminal activity is quite costly. And, as Beccaria (1764) proclaimed in his much-heralded seminal thesis on the subject, the costs of criminal activity have indeed a societal scope. The costs of crime range from the very obvious to the indirect and intangible. From private wallets and public coffers, billions of dollars are spent each year in the hopes of preventing crime, and billions more are lost as a result of crime. Still billions more are lost as victims live in pain and potential victims live in fear. The need for the development of an understanding of the nature and extent of the costs of crime exists within many disciplines. As a consequence, perspectives on the costly nature of criminal activity have emerged from multiple perspectives and through the application of multiple techniques. In this chapter, I hope to shed some light on our current understanding of the nature of the costs of crime through a critical analysis of the literature in the area. In pursuit of this objective, an enumeration of the parties affected by criminal activity will be followed by a discussion of the numerous estimation techniques employed in gaging the extent of these costs. As will become apparent, many of the costs of criminal activity are quite difficult to measure; therefore general weaknesses of each approach will be examined. The total costs...

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