This paper reports on a new approach to valuing crime based on the "willingness-to-pay" (WTP) concept, using the "contingent valuation" (CV) methodology developed in the environmental economics literature.
The CV methodology has been used extensively to place dollar values on nonmarket goods such as improvements in air quality, saving endangered species, and reducing the risk of early death. The survey questionnaire, which was developed through a panel of experts and focus groups, asked respondents if they would be willing to vote for a proposal that required each household in their community to pay a certain amount to be used to prevent 1 in 10 crimes. They were then randomly given three of five crimes; the order of the questions was randomized to avoid any systematic bias associated with "anchoring" to the first crime. The questionnaire thus attempted to measure individual willingness to pay based on actual levels of fear of particular crimes and concern about crime in general in the community. Telephone interviews were conducted with a sample representative of the entire U.S. population of adults (age 18 or older). Of 2,228 households contacted, 1,300 completed interviews. Data were weighted to adjust for probabilities of selection and to adjust for nonresponse on age, sex, education, and race. Results of this study can be projected to the English-speaking population 18 years old or older living in households in the 50 United States and the District of Columbia. The study found that the typical household would be willing to pay between $100 and $150 per year for crime prevention programs that reduced specific crimes by 10 percent in their communities, with the amount increasing with crime seriousness. In the aggregate, these amounts imply a marginal WTP to prevent crime of about $25,000 per burglary, $70,000 per serious assault, $232,000 per armed robbery, $237,000 per rape and sexual assault, and $9.7 million per murder. Based on the WTP approach, these figures are between 1.5 and 10 times higher than prior estimates of the cost of crime to victims. The results of this pilot study of WTP provide support for continuing this research method. Preliminary estimates of the cost per crime appear to be reasonable and considerably higher than previous estimates that focused primarily on victim costs while excluding other costs to the community. 4 tables and 21 references