Valuing the public’s demand for crime prevention programs: a discrete choice experiment
- 37 Downloads
The objectives of the study were (a) to utilize 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 and (b) to demonstrate the feasibility of this method for crime cost estimation and for using these surveys in developing countries.
The study used a random sample of households from an online panel in Buenos Aires. Respondents were asked to choose among three options with factorial design varying homicide rate, violent crime rate, policy measures to reduce crime, and tax impact (with one option being status quo). Discrete choice modeling was utilized to estimate 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 average $2000. In addition to extending intangible crime cost estimates to Latin America, we simultaneously 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.
Discrete choice experiments can be credibly adopted to estimate the cost of crime. We implement this method in a Latin American country, where the estimated costs in Buenos Ares are consistent with those 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 social benefit–cost analysis.
KeywordsCost of crime Choice experiment Willingness-to-pay Survey methodology Value of statistical life
Emilio Picasso gratefully acknowledges the funding for data collection for this project from the Universidad Católica Argentina.
The datasets generated during and/or analyzed during the current study are available from the corresponding author upon reasonable request.
- Adamowicz, W., Louviere, J. & Swait, J. (1998). Introduction to attribute-based stated choice methods. Report submitted to the Resource Valuation Branch, Damage Assessment Center, NOAA (National Oceanic and Atmospheric Administration), US Department of Commerce.Google Scholar
- Aos, S. (2015). What is the bottom line? Criminology & Public Policy, 14(4), 633–638.Google Scholar
- Arrow, K.J., Solow, R., Portney, P.R., Leamer, E.E., Radner, R. & Schuman, H. (1993). Report of the NOAA Panel on Contingent Valuation. Federal Register, 58: 4601-4614 (Jan 15).Google Scholar
- Atkinson, G., Healey, A., & Mourato, S. (2005). Valuing the costs of violent crime: a stated preference approach. Oxford Economic Papers, 57, 559–585.Google Scholar
- Black, D. A., Solow, R. M., & Taylor, L. J. (2015). Comments on Dominguez and Raphael. Criminology & Public Policy, 14, 639–646.Google Scholar
- Boardman, A. E., Greenberg, D. H., Vining, A. R., & Weimer, D. L. (2011). Cost-benefit analysis: concepts and practice, 4 th edition. Upper Saddle River, NJ: Pearson.Google Scholar
- Brand, S. & Price, R. (2000). The economic costs of crime. Home Office Research Study 217 Buenos Aires city data bank. Available at: http://www.estadisticaciudad.gob.ar/eyc/?page_id=5360.
- Carson, R. T., Mitchell, R. C., Hanemann, M., Kopp, R. J., Presser, S., & Ruud, P. A. (2003). Contingent valuation and lost passive use: damages from the Exxon Valdez oil spill. Environmental Resource Economics, 25, 257–286.Google Scholar
- Carson, R. T., & Louviere, J. J. (2017). Estimation of broad-scale tradeoffs in community policing policies. Journal of Benefit-Cost Analysis, 8(3), 385–398.Google Scholar
- Caussade, S., Ortuzar, J. D. D., Rizzi, L. I., & Hensher, D. (2005). Assessing the influence of design dimensions on stated choice experiment estimates. Transportation Research Part B, 39, 621–640.Google Scholar
- Cohen, M.A. (2016). The “cost of crime” and benefit-cost analysis of criminal justice policy: understanding and improving upon the state-of-the-art. Working paper, http://ssrn.com/abstract=2832944.
- Cohen, M. A. (2015). Willingness to pay to reduce white collar and corporate crime. Journal of Benefit-Cost Analysis, 6(2), 305–324.Google Scholar
- Cohen, M. A. (2010). Valuing crime control benefits using stated preference approaches. In J. K. Roman, T. Dunworth, & K. Marsh (Eds.), Cost-benefit analysis and crime control (pp. 73–118). Washington: Urban Institute Press.Google Scholar
- Cohen, M. A. (2005). The costs of crime and justice. New York: Routledge.Google Scholar
- Cohen, M. A. (1988). Pain, suffering and jury awards: a study of the cost of crime to victims. Law & Society Review, 22, 537–555.Google Scholar
- Cohen, M. A., & Piquero, A. R. (2009). New evidence on the monetary value of saving a high risk youth. Journal of Quantitative Criminology, 25, 25–49.Google Scholar
- Cohen, M. A., Rust, R. T., Steen, S., & Tidd, S. T. (2004). Willingness-to-pay for crime control programs. Criminology, 42, 86–106.Google Scholar
- DeLisi, M. (2016). Measuring the cost of crime. In B. M. Huebner & T. S. Bynum (Eds.), The handbook of measurement issues in criminology and criminal justice (pp. 416–433). New York: Wiley.Google Scholar
- Desvousgues, W., Mathews, K., & Train, K. (2012). Adequate responsiveness to scope in contingent valuation. Ecological Economics, 84, 121–128.Google Scholar
- Di Tella, R., Galiani, S., & Schargrodsky, E. (2010). Crime distribution & victim behavior during a crime wave. In R. Di Tella, S. Edwards, & E. Schargrodsky (Eds.), The economics of crime: lessons for and from Latin America (pp. 175–204). Chicago: University of Chicago Press.Google Scholar
- Dominguez, P., & Raphael, S. (2015). The role of the cost-of-crime literature in bridging the gap between social science research and policy making. Criminology & Public Policy, 14(4), 589–632.Google Scholar
- Donohue, J. J., & Ludwig, J. (2007). More cops. Policy brief #158. Washington: Brookings Institution.Google Scholar
- Evans, W. N., & Owens, E. G. (2007). COPS and crime. Journal of Public Economics, 91, 181–201.Google Scholar
- Farrington, D. P., & Welsh, B. C. (2002). Improved street lighting and crime prevention. Justice Quarterly, 19, 313–342.Google Scholar
- Farrow, S., & Viscusi, W. K. (2011). Towards principles and standards for the benefit-cost analysis of safety. Journal of Benefit-Cost Analysis, 2(3), 1–25.Google Scholar
- Federov, V.V. (1972). Theory of experiments. (Translated and edited by W.J. Studen & E.M. Klimko, New York: Academic).Google Scholar
- Hausman, J. (2012). Contingent valuation: from dubious to hopeless. Journal of Economic Perspectives, 26, 43–56.Google Scholar
- Hensher, D. A. (2004). Identifying the influence of stated choice design dimensionality on willingness to pay for travel time savings. Journal of Transport Economics & Policy, 38, 425–446.Google Scholar
- Hensher, D. A. (2006). Revealing differences in willingness to pay due to the dimensionality of stated choice designs: an initial assessment. Environmental & Resource Economics, 34, 7–44.Google Scholar
- Hensher, D. A., Rose, J. M., de Dios Ortuzar, J., & Rizzi, L. I. (2009). Estimating the willingness to pay and value of risk reduction for car occupants in the road environment. Transportation Research Part A, 43, 692–707.Google Scholar
- Instituto Nacional de Estadistica y Censos (INDEC). (2014). Encuesta Nacional de Jóvenes: Principales resultados. https://www.indec.gov.ar/ftp/cuadros/poblacion/resultados_enj_2014.pdf.
- Jaitman, L. (Ed.). (2017). The costs of crime and violence: new evidence and insights in Latin America and the Caribbean. Washington: Inter-American Development Bank.Google Scholar
- Kahneman, D., & Tversky, A. (1979). Prospect theory: an analysis of decision under risk. Econometrica, 47, 263–291.Google Scholar
- Kniesner, T. J., Viscusi, K. W., & Ziliak, J. P. (2010). Policy relevant heterogeneity in the value of statistical life: new evidence from panel data quantile regressions. Journal of Risk & Uncertainty, 40, 15–31.Google Scholar
- Kuklinski, M. R., Fagan, A. A., Hawkins, J. D., Briney, J. S., & Catalano, R. F. (2015). Benefit–cost analysis of a randomized evaluation of communities that care: monetizing intervention effects on the initiation of delinquency and substance use through grade 12. Journal of Experimental Criminology, 11, 165–192.Google Scholar
- Levitt, S. D. (1996). The effect of prison population size on crime rates: evidence from prison overcrowding litigation. The Quarterly Journal of Economics, 111(2), 319–351.Google Scholar
- Louviere, J. J., Hensher, D. A., & Swait, J. D. (2000). Stated choice methods: analysis and applications. New York: Cambridge Univ. Press.Google Scholar
- Ludwig, J., & Cook, P. J. (2001). The benefits of reducing gun violence: evidence from contingent valuation survey data. Journal of Risk & Uncertainty, 22, 207–226.Google Scholar
- Lugo, K., Przybylski, R., Farley, E., Howley, S., Liberman, A., Yahner, J., Dusenbery, M., Ervin, S., Henderson, E., Welsh-Loveman, J., Vasquez-Noriega, C. & Garcia, O. (2019). Estimating the financial costs of crime victimization. Final report prepared for the National Institute of Justice, Office of Justice Programs, United States Department of Justice. Washington, D.C.Google Scholar
- Masterman, C.J. & Viscusi, V.K. & (2018). The income elasticity of global values of a statistical life: stated preference evidence. Journal of Benefit-Cost Analysis, 9(3), 407–434.Google Scholar
- Miller, T. R., Cohen, M. A., & Wiersema, B. (1996). Victim costs and consequences: a new look. Washington: National Institute of Justice.Google Scholar
- Meyer, R. K., & Nachtsheim, C. J. (1995). The coordinate-exchange algorithm for constructing exact optimal experimental designs. Technometrics, 37, 60–69.Google Scholar
- Moreno, C. & Salvia, A. (2012). Vulnerabilidad al Delito y Sentimiento de Inseguridad en las Grandes Áreas Urbanas de la Argentina. Universidad Católica Argentina.Google Scholar
- Nagin, D. S., Piquero, A. R., Scott, E. S., & Steinberg, L. (2006). Public preferences for rehabilitation versus incarceration of juvenile offenders: evidence from a contingent valuation survey. Criminology & Public Policy, 5, 627–652.Google Scholar
- Picasso, E. & Conte Grand, M. (2019) The value of the risk to life in the context of crime. Journal of Benefit-Cost Analysis. (forthcoming).Google Scholar
- Piquero, N. L., Cohen, M. A., & Piquero, A. R. (2010). How much is the public willing to pay to be protected from identity theft? Justice Quarterly, 28(3), 437–458.Google Scholar
- Piquero, A. R., & Steinberg, L. (2010). Public preferences for rehabilitation versus incarceration of juvenile offenders. Journal of Criminal Justice, 38(1), 1–6.Google Scholar
- Piza, E. L., Gilchrist, A. M., Caplan, J. M., Kennedy, L. W., & O’Hara, B. A. (2016). The financial implications of merging proactive CCTV monitoring and directed police patrol: a cost–benefit analysis. Journal of Experimental Criminology, 12, 403–429.Google Scholar
- PNUD (Programa de las Naciones Unidas para el Desarrollo). (2013). Informe Regional de Seguridad Ciudadana. Ed. PNUD.Google Scholar
- Rizzi, L. I., & Ortuzar, J. D. D. (2003). Stated preference in the valuation of interurban road safety. Accident Analysis & Prevention, 35, 9–22.Google Scholar
- Rosen, S. (1983). The equilibrium approach to labor markets. National Bureau of Economic Research Working Paper No. 1165.Google Scholar
- Saelensminde, K. (2003). Embedding effects in valuation of non-market goods. Transport Policy, 10, 59–72.Google Scholar
- Schargrodsky, E. & Di Tella, R. (2013). Informe del Laboratorio de Investigaciones sobre Crimen, Instituciones y Políticas. Universidad Torcuato.Google Scholar
- Shanahan, M., & Ritter, A. (2014). Intangible outcomes from a policy change: using contingent valuation to quantify potential stigma from a cannabis offence. Journal of Experimental Criminology, 10, 59–77.Google Scholar
- Soeiro, M. & Teixeira, A.A.C. (2010). Determinants of higher education students willingness to pay for violent crime reduction: a contingent valuation study. Working paper, Faculdade de Engenharia, Universidade do Porto. Google Scholar
- Thaler, R. H. (1978). A note on the value of crime control: evidence from the property market. Journal of Urban Economics, 5, 137–145.Google Scholar
- Train, K. (2009). Discrete choice methods with simulation. Cambridge: Cambridge University Press.Google Scholar
- Tversky, A., & Kahneman, D. (1986). Rational choice and the framing of decisions. Journal of Business, 59(4.2), S251–S278.Google Scholar
- U.S. Department of Justice. (2012). Prison Rape Elimination Act, Regulatory Impact Assessment, http://ojp.gov/programs/pdfs/prea ria.pdf.
- Viscusi, K. W., & Aldy, J. E. (2003). The value of a statistical life: a critical review of market estimates throughout the world. Journal of Risk & Uncertainty, 27, 5–76.Google Scholar
- Viscusi, K. W., & Masterman, C. J. (2017). Income elasticities and global values of a statistical life. Journal of Benefit-Cost Analysis, 8(2), 226–250.Google Scholar
- Weisburd, D., Farrington, D. P., & Gill, C. (2017). What works in crime prevention and rehabilitation. Criminology & Public Policy, 16(2), 415–449.Google Scholar
- Welsh, B. C., Farrington, D. P., & Gowar, B. R. (2015). Benefit-cost analysis of crime prevention programs. Crime and Justice, 44(1), 447–516.Google Scholar
- World Bank. GDP per capita. Available at: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD.
- Zarkin, G. A., Cates, S. C., & Bala, M. V. (2000). Estimating the willingness to pay for drug abuse treatment: a pilot study. Journal of Substance Abuse Treatment, 18, 149–159.Google Scholar