Counting the Costs of Crime in Australia

By Mayhew, Pat | Trends & Issues in Crime and Criminal Justice, April 2003 | Go to article overview

Counting the Costs of Crime in Australia


Mayhew, Pat, Trends & Issues in Crime and Criminal Justice


This paper assesses some of the major costs for a range of offences. Some of the figures are inevitably tenuous, as there is insufficiently good data to improve the estimates. Nonetheless, this paper represents a major update of previous work by the Australian Institute of Criminology on the costs of crime, and gives the most sophisticated and credible estimates in Australia to date.

The cost of the crimes covered here amounts to $19 billion. Other costs (such as policing, prisons and the security industry) add nearly another $13 billion. The total estimated bill is nearly $32 billion per year. Fraud is the most costly crime, followed by violent crime (homicide, assault and sexual assault) and burglary. The human cost of drug abuse is also high, even discounting crimes committed to support a drug habit.

The figures in this paper are based on many "behind the scenes" calculations. These are set out in a technical report (Mayhew 2003) which can be accessed at www.aic.gov.au/publications/tbp/tbp004.html. This makes the basis of the estimates transparent, which will be useful for updating estimates of costs when new information becomes available. While some categories are tenous, the AIC would be willing to develop a project to conduct further analysis in certain categories (for example fraud, arson).

Adam Graycar

Director

No study, in Australia or elsewhere, has ever fully assessed the myriad costs of crime. Rather, the main focus has been on what countries spend on their criminal justice systems (usually a matter of public record), and on some of the more direct costs of crime. The Australian Institute of Criminology has previously generated estimates of the costs of crime in Australia (Walker 1992; 1997). This paper uses more up-to-date figures and includes some additional costs. Chief among these is an assessment of the monetary value of pain, suffering and lost quality of life- so-called "intangible" costs. Estimates of lost productivity are also included.

The empirical basis for assessing costs is weak in many cases. One difficulty is simply knowing the actual number of crimes to cost: the extent of shoplifting and fraud, for instance, is hard to pin down. Nor is the data for many cost components complete or necessarily sound. Some components are not amenable to costing. It is impossible to put a price on lost quality of life from fear of crime, for example, or on wider economic distortions such as lack of investment in high-crime areas.

Nonetheless, getting a bearing on the costs of crime is important. They set in better context the substantial resources spent trying to prevent crime and deal with offenders. Knowing what different crimes cost, rather than simply knowing their numbers, gives a better base for assessing where crime prevention efforts are best targeted. It is also essential to cost-benefit analysis, in which the costs of crime reduction initiatives are set against savings made from crimes prevented.

Average "unit" costs can show the impact of an average motor vehicle theft, for instance, relative to an average robbery. Average unit costs are given here, with the obvious caveat that costs for particular incidents will vary widely. It is also important to compare the overall costs of different types of crime, in order to see which have the biggest financial impact taking account of the number of crimes involved. For this reason, as many crime types as possible have been included. However, some get a lighter touch than others, because of paucity of information. There are also some offences that are not costed (see "Omissions" below).

The main principles of the approach taken to costing are outlined below. The accompanying technical report gives further information on the estimates made (available at www.aic.gov.au/ publications/tbp/tbp004.html).

Estimating the Number of Crimes

To assess the full impact of crime, one needs to estimate the actual number of crimes that occur rather than the number recorded by police. …

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