The Cost of Pain Suffering from Crime in Canada

1. Introduction

One of the major goals in formulating crime control policies and programs is to enhance the well-being of society. Economic analysis can be a valuable tool in working towards achieving this goal. Comparing the monetary costs of a program to its monetary benefits can help determine whether a particular crime control program is economically efficient. When its benefits outweigh its costs, then a program is considered efficient and beneficial to society.

There are, however, few studies that systematically evaluate the costs and benefits of crime prevention programs. Part of the difficulty with this kind of study is that information on certain intangible costs of crime such as the fear, pain, suffering, and reduced quality of life experienced by crime victims is not easy to obtain and evaluate. While tangible out-of-pocket expenses, such as property loss and medical expenses, are relatively easy to evaluate, intangible costs, such as fear, pain, suffering, and reduced quality of life, though too important to ignore, can be extremely difficult to assess. Norris et al. (1997) reported that about half of violent crime victims expressed moderate to extreme distress after the crimes they experienced. Although these outcomes of victimization are not readily seen in monetary terms, individuals are willing to pay real dollars in exchange for not having to endure the emotional and psychological pain that is associated with victimization. Early studies on the estimation of the cost of crime always omitted the cost of the pain and suffering of crime victims because of a lack of available information.

Since the cost of pain and suffering is a subjective concept that varies according to individual perception and attitude, it is difficult to quantify these values. From an economic perspective, an individual's well-being is affected by things, both tangible and intangible, that can contribute to human satisfaction or dissatisfaction. For instance, to enhance the welfare of an economy as a whole, individual members of society seek to decrease the things that contribute to human unhappiness, such as the pain and suffering experienced by crime victims. To account for the social cost of crime, therefore, it is important to include estimates for the cost of pain and suffering from crime.

As pointed out by Viscusi (1993), health and safety risks contribute to human unhappiness. One possible source of health risk is the distress that results from the pain and suffering caused by crime. In the economic literature, victim costs are typically estimated based on two data sources: (1) contingent valuation [2] placed on safety by the public and (2) the amounts awarded by juries to crime victims for the suffering and loss of productivity resulting from crime.

To minimize health risks, individuals generally aim to avoid activities that present such risks. Most individuals are willing to accept a higher level of health risk when higher premiums are offered as compensation. In the broadest sense, such compensation is considered a measure of an individual's contingent valuation on pain and suffering. In the economic literature, the dominant approach to estimating the risk-dollar tradeoff between health risks and the corresponding compensation required is to use labour market data on worker wages for risky jobs (Viscusi, 1993). When workers accept jobs with potential exposure to work injuries which might cause pain and suffering, it is an indication of their contingent valuation on the pain and suffering which might result from exposure to health risks in exchange for monetary compensation.

To estimate the cost of pain and suffering from crime, Anderson (1999) followed the suggestion of Viscusi and used labour market estimates as a proxy for the value of life and injury based on individual willingness to accept work that might affect health. Studies that have used labour market estimates as a proxy for the value of life and injury may represent conservative estimates of the risks to life and health that crime presents since there is likely a higher level of stress in the case of crime. Other studies used jury awards in personal injury accident cases to obtain monetary values for pain, suffering, and fear. However, Canadian data on jury awards can be difficult to obtain as they are not publicly available. Given these limitations, this study attempts to devise a more viable method to provide some preliminary estimates of the cost of pain and suffering from crime in Canada.

The objective of this study is to estimate the cost of pain and suffering from crime in Canada, both overall and for specific categories of crime, namely violent crimes, including homicide, assault, sexual offences, and robbery; property crimes, including breaking and entering, motor vehicle theft, non-vehicle theft, and vandalism; and other crimes, namely drug offences and Criminal Code traffic offences. This paper begins with a brief review of the recent literature on victimization costs, followed by an analysis and estimation of the cost of pain and suffering from crime in Canada.

[2] Contingent valuation refers to the value people place on something that may or may not happen, that is, how much they are willing to pay to feel safe or to avoid risks or losses.