Valuing the Public's Demand for Crime Prevention Programs: A Discrete Choice Experiment
43 Pages Posted: 10 Aug 2017 Last revised: 12 Feb 2019
Date Written: April 25, 2018
This study utilizes a state-of-the-art survey methodology previously employed in the environmental, health and safety economics literatures to estimate the cost of violent crime and homicide in Buenos Aires. We demonstrate the feasibility of this method for crime cost estimation and for using these surveys in developing countries. Through a random sample of 269 households from an online panel in Buenos Aires, respondents were asked to choose among three options with a factorial design varying homicide rate, violent crime rate, policy measures to reduce crime, and tax impact. Discrete choice modeling estimates the willingness-to-pay for reduction in risk of homicide and violent crime as well as independent values for two policy options. The cost of homicide in Buenos Aires is estimated to be approximately $1.5 million, whereas the cost of other violent crimes (including rape, robbery and aggravated assault) is estimated to be $2,000. In addition to extending intangible crime cost estimates to Latin America, we estimate the value of two comprehensive crime control policies, with values ranging from $600 to $700 million/year, about $12 per household per month each. The estimated costs in Buenos Ares are consistent with that found in developing countries once controlling for income differences. These subjective crime cost valuations are significantly higher than tangible crime costs, and thus provide a significant improvement in the ability of policy makers to conduct benefit-cost analysis.
Keywords: cost of crime, value of statistical life, choice experiment, survey methodology
JEL Classification: K14, J17, H4
Suggested Citation: Suggested Citation