The costs of crime

W hat economist would not be delighted to see more work in criminology devoted to benefit–cost analysis (BCA)? In my policy essay, I would like to make three points. First, the application of BCA to crime policy raises several difficult (or at least subtle) conceptual and practical issues, which include the question of whether to use “bottom-up” versus “top-down” estimates for the costs of crime—an important decision because the two procedures yield figures that differ by a factor of two. Philip Cook and I argued that the “topdown” approach is the conceptually correct framework (Cook and Ludwig, 2000), although this approach raises several measurement challenges that I will discuss here that are in desperate need of intensive study. Second, it is worth making explicit a point that has been raised implicitly in Cohen, Piquero, and Jenning’s article (2010, this issue); the costs (as well as the benefits) of crime prevention might vary across offending trajectories, and so decisions about how to target resources across offending trajectories need to focus on the ratio of benefits to costs and not just focus on the benefit side of the ledger. Finally, the practical policy implications of combining BCA and trajectory analysis are limited, as Cohen et al. (2010) have noted, by the difficulty of identifying the offending groups of people prospectively. One suggestion I have is to consider using information about the criminal involvement of parents, because of previous evidence about strong intergenerational correlations in offending behavior. But even if we cannot target interventions as well as we would like, the social costs of crime are so large that American society seems likely to be underinvesting right now in most forms of crime prevention, with the possible exception of mass incarceration.