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Report: Violent Crime Reductions Offer Economic Benefits

Murder, rape, assault and robbery in the U.S. imposed $42 billion — $137 per American — in direct costs in 2010. These costs, comprised of costs to police, courts and correctional institutions, out of pocket medical expenses borne by victims and lost earnings by victims and perpetrators, represent an opportunity to derive economic benefits by reducing violent crime.

The Center for American Progress’ new report, “The Economic Benefits of Reducing Violent Crime,” [PDF] examines the economic costs of violent crime and concludes that “successful efforts to reduce violent crime can generate significant savings for municipal budgets and large benefits for residents.”

The report’s authors acknowledge that much of the damage from violent crime comes in the form of intangible costs, including the pain and suffering from victims, however a study of U.S. cities found that reducing violent crime by 10 percent and 25 percent would provide considerable, tangible, economic benefits to those local economies.

The costs of violent crime were examined in eight cities — Boston, Chicago, Dallas, Houston, Jacksonville, Milwaukee, Philadelphia and Seattle — and broken down into “direct” and “intangible” costs:

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Estimated savings for municipal budgets from reducing violent crime by 25 percent ranged from $6 million per year in Seattle to $59 million per year in Chicago. But the major economic benefits derive from the impact of lower rates of violent crime on housing values. “On average, a reduction in a given year of one homicide in a zip code causes a 1.5 percent increase in housing values in that same zip code the following year,” write Robert J. Shapiro and Kevin A. Hassett in their report. They find:

The estimated increases in the value of the housing stock for the eight cities and their immediate metropolitan areas, following a 10 percent reduction in homicides, range from $600 million in Jacksonville and the surrounding area to $800 million in the Milwaukee area, to $3.2 billion in Philadelphia and the surrounding suburbs, and $4.4 billion in the Boston area.

While the report focuses on the economic benefits from reducing violent crime, the authors offer several examples of effective methods for reducing crime. Policing that focuses criminal justice and social service attention on a small number of chronically offending gang members produced a 43 percent decline in gun violence and a 66 percent reduction in gang-related homicides in one study. And a 1997 meta-analysis by the Department of Justice identified that family therapy; parent training efforts and vocational training have proven effective in reducing crime rates.