The Economic Cost of Crime

Crime generates external costs for individuals and social costs for nations. This chapter reviews the dominant theoretical paradigms that underlie national estimates of the cost of crime and reviews the empirical methodologies that have been employed in the extant literature. The chapter closes with a brief review of empirical estimates of the costs of crime to crime victims. In the United States, the cost of crime, narrowly construed, constitutes approximately 2 percent of gross domestic product, approximately double the amount of revenue generated by the education sector and half the amount of revenue produced by the U.S. entertainment industry. Some estimates of the cost of crime are as large as 6 percent of GDP. Prepared for The Encyclopedia of Crime and Punishment