The Cost of Crime in Nova Scotia

By Dodds, Colin; Colman, Ronald | Journal of Business Administration and Policy Analysis, Annual 1999 | Go to article overview

The Cost of Crime in Nova Scotia


Dodds, Colin, Colman, Ronald, Journal of Business Administration and Policy Analysis


Crime conservatively cost Nova Scotians more than half a billion dollars in economic losses to victims; public spending on police, courts and prisons; and private spending on crime prevention in 1997 (Table 1). This amounts to nearly $600 for every man, woman and child in the province, or $1,650 per household. When losses due to unreported crimes, insurance fraud and shoplifting are added, as well as the costs of shattered lives due to crime, the loss is nearly $1.2 billion a year or $1,250 per person ($3,500 per household). These crime costs amount to between 3% and 6.3% of the provincial GDP. The distribution of these costs is demonstrated in Figures 1 and 2. Per capita crime costs in Canada are estimated to be 20% - 25% higher than crime costs in Nova Scotia.

These estimates do not include deaths, injuries and property damage due to impaired driving; non-hospital medical, drug and counseling costs; private spending on criminal lawyers; non-retail business spending on alarms, electronic surveillance and other crime prevention and detection equipment; most white collar crime; and a wide range of indirect crime costs. Also, monetary estimates clearly convey only a small part of the true costs of crime, which include the trauma of being violated, pain and suffering, fear and insecurity, and lost opportunities to undertake activities because of crime risks.

In our conventional economic accounts, most crime costs are perversely counted as contributions to economic prosperity and well being. The higher the crime rate and the more we spend on prisons, police, criminal trials, burglar alarms and security systems, the more our economy grows, which in turn is taken as the primary sign of progress.

By contrast, the Genuine Progress Index (GPI) regards crime as a liability rather than an asset, and its costs as an economic loss rather than a gain. Unlike the GDP, lower crime rates make the GPI go up, and higher crime rates make it go down. Reduced crime costs are seen as savings that can be invested in more productive activities that build communities and enhance well being. Higher costs to maintain a given level of security indicate a decline in the quality of life.

Unlike current measures of progress based on the GDP, the GPI does not view all economic growth as an unqualified good. Crime, pollution and other "regrettable" costs point to sectors of the economy where limits to growth may signify well being, prosperity and progress more accurately than continued growth.

A peaceful, harmonious and secure society is therefore valued as a vital and profound social asset that directly benefits the economy and the quality of life of its citizens. Conversely, high crime rates signify a depreciation of that asset and an erosion of the social and economic value that derive from personal security and social stability.

By registering crime costs as an economic loss to society, the GPI demonstrates the inability of market statistics alone to provide adequate benchmarks of progress, and can signal the need for policy initiatives and investments to overcome the causes of crime.

In this case limits to growth in crime rates and crime costs are more indicative of progress than unlimited growth.

CRIME IN COMPARATIVE PERSPECTIVE

From the perspective of conventional market statistics, the Atlantic provinces are generally seen as economically disadvantaged by comparison to the rest of the country. But the reliance on market statistics nationally and internationally produces faulty and misleading comparisons. If a peaceful and secure society is viewed as an important social asset making a vital contribution to the quality of life, and if crime costs are seen as an economic

drain eroding the standard of living, then Nova Scotia and its neighbouring provinces have a significant comparative advantage.

The Nova Scotia crime rate for serious violent crimes is just 63% of the Canadian rate; it is 82% of the national property crime rate, and less than half the rate for robberies and motor vehicle thefts. …

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