The Cost of Pain Suffering from Crime in Canada

5.0 Estimation of the Cost of Pain and Suffering from Crime in Canada

5. Estimation of the Cost of Pain and Suffering from Crime in Canada

Based on the methodology described in section 4, the cost of the pain and suffering resulting from various types of crime are derived in this section. As previously mentioned, police statistics underestimate the number of crime incidents due to underreporting and various constraints faced by law enforcement officials. Victimization surveys provide better estimates of the actual number of crime incidents, but the estimates may be biased due to sample selection problems. Furthermore, victimization information from the GSS does not include all the types of crime included in the present analysis. The limitation on data, therefore, remains a serious problem in estimating the cost of the pain and suffering of crime victims in Canada. The computation of cost using both police records and information from the GSS is presented here for comparison purposes. All estimated figures hereafter are recorded in 1999 Canadian dollars since the GSS data were collected in 1999. The types of crime discussed are violent crimes, property crimes, and other types of crime, namely drug offences and Criminal Code traffic offences. The estimation results are contained in Table 4.

Table 4: Estimated Cost of the Pain and Suffering of Crime Victims Based on Non-fatal Injuries
Type of crime Cost Based on Police-Reported Statistics * ($ million) Cost Based on GSS Data * ($ million)
Homicide # † 2,200 2,200
Assault 2,790 7,730
Sexual Assault 400 5,930
Robbery 455 4,570
Violent Crimes 5,840 20,430
Breaking and Entering 1,020 3,420
Motor Vehicle Theft 383 3,510
Theft (Not Vehicle) 1,440 5,310
Mischief/Vandalism 788 2,810
Property Crimes 3,630 15,040
Drug Offences † 131 131
Criminal Code Traffic Offences † 225 225
Other Crimes † 356 356
All Crimes 9,830 35,830

5.1 Violent Crimes [7]

The GSS contains victimization information on three types of violent crime: assault, sexual offences, and robbery. It is obvious that the GSS cannot gather information from victims of homicide. The number of incidents from police records will therefore be used for homicide. As previously mentioned, the number of homicide incidents reported in police statistics is likely to provide reliable estimates due to the nature of the crime and the evidence that can be collected after such a crime.

By definition, homicide victims experienced fatal injuries. For the cost of other types of violent crime estimated in the present analysis, two types of cost estimations can be compared based on whether the injuries suffered by a crime victim are fatal or non-fatal. [8] For the purpose of this report, only cost estimates based on non-fatal risks are used. For non-fatal injuries, the average cost of pain and suffering is estimated as $72,000 per victim. The estimated cost of pain and suffering for various types of crime is provided in Table 4.

Based on the estimated statistical value of a human life according to previous literature, the cost of pain and suffering from the 536 incidents of homicide reported by police statistics in 1999 is $2.2 billion. For other types of violent crime, the cost of pain and suffering can be estimated by using the methodology described in section 4. The cost figures can vary, however, depending on the data sources used for the number of incidents. For these numbers, the figures reported by police statistics are significantly smaller than those from the GSS due to underreporting. The estimated costs for various types of crime based on police records are, therefore, much lower.

When the perceived risks are based on non-fatal injuries, the average cost of the pain and suffering of a crime victim is estimated to be $72,000. The cost of pain and suffering for non-fatal injuries from assault, sexual offences, and robbery are then estimated to be $2.79 billion, $400 million, and $455 million respectively, based on the number of incidents reported by police statistics in 1999. The total cost of these violent crimes is, therefore, estimated to be $5.84 billion, if the perceived injuries are non-fatal.

As shown in Table 4, the estimated cost of pain and suffering for different categories of violent crime are much higher when the calculation is based on GSS data. The cost of pain and suffering for non-fatal injuries from assault, sexual offences, and robbery is estimated to be $7.73 billion, $5.93 billion, and $4.57 billion respectively, based on the number of incidents reported in the GSS on victmization. The total cost of these violent crimes is, therefore, estimated to be $20.43 billion for non-fatal injuries when it is based on GSS data.

5.2 Property Crimes

The four types of property crime included for cost estimation here are breaking and entering, motor vehicle theft, non-vehicle theft, and vandalism. [9] Both the police statistics and the GSS data contain information on all four types of crime. For each of these different types of crime, as in the estimation for violent crime, a comparison can be drawn between figures obtained using police statistics and the GSS data. Property crimes by definition do not involve human victims and are not likely to lead to fatal injuries. Only the values for non-fatal injuries will be assessed for property crimes. Furthermore, it is assumed in this estimation that 25% of the worries experienced by property crime victims are a direct consequence of their crime experiences, meaning that a discount factor of 0.25 is chosen for the current analysis. It is therefore implied that the cost of the pain and suffering borne by property crime victims is much higher if a higher discount factor is used.

Using information from police statistics, the estimated cost of pain and suffering for non-fatal injuries from the four types of property crime are $1.02 billion for breaking and entering, $383 million for motor vehicle theft, $1.44 billion for non-vehicle theft, and $788 billion for vandalism, with a discount factor of 0.25. Based on information from police statistics, the cost of property crimes is, therefore, estimated to be $3.63 billion for non-fatal injuries.

As shown in Table 4, the corresponding figures are much higher when the estimation is based on the GSS data. The costs of pain and suffering from breaking and entering, motor vehicle theft, non-vehicle theft, and vandalism are estimated to be $3.42 billion, $3.51 billion, $5.31 billion, and $2.81 billion respectively, based on the number of incidents reported in the GSS for perceived non-fatal injuries when a discount factor of 0.25 is used. Based on information from the GSS data, the cost of property crimes is, therefore, estimated to be $15.04 billion for non-fatal injuries.

5.3 Other Crimes

The remaining two types of crime discussed in the current analysis are drug offences and Criminal Code traffic offences. By definition, drug overdoses and reckless driving can cause fatal injuries. However, for the purpose of this report, only cost estimates based on non-fatal injuries are given. Since the GSS does not contain any information on drug offences and Criminal Code traffic offences, the cost estimations for these two types of crime are based on the number of incidents reported by police statistics. Because of underreporting and constraints faced by the police, the cost of pain and suffering for these two types of crime are likely to be underestimated.

The cost of pain and suffering from drug offences and Criminal Code traffic offences is estimated to be $131 million and $225 million respectively, based on non-fatal injuries and a discount factor of 0.25. The cost is much higher if the estimates are based on fatal injuries. [10]

5.4 Total Cost for All Crimes

The total cost of pain and suffering for all crimes is estimated in the present analysis based on four types of violent crime-homicide, assault, sexual assault, and robbery; four types of property crime-breaking and entering, motor vehicle theft, non-vehicle theft and vandalism; and two other types of crime-drug offences and Criminal Code traffic offences. [11] The most conservative estimate is based on the assumption that all crime victims perceive their risk of injuries as non-fatal and only 25% of the worries expressed by property crime victims are caused directly by their crime experiences. The total crime bill for all crimes in this case adds up to $9.83 billion based on the number of incidents reported by police statistics and $35.83 billion based on data from the GSS. In the case of violent crime, if the risk to safety is perceived as fatal by victims, then the estimated cost is based on the implicit value of human life, and the corresponding cost estimates are much higher.

5.5 Sensitivity Analysis

The final estimation of the cost for various types of crime will change, rather drastically in some cases, when the analysis is based on different assumptions. For example, if it is assumed that all the worries of property crime victims can be attributed to their crime experiences, then the cost of pain and suffering from property crimes will be four times higher than the earlier estimates using a 0.25 discount factor. Based on GSS data, this implies that the costs for breaking and entering, motor vehicle theft, non-vehicle theft, and vandalism will be $13.68 billion, $14.02 billion, $21.22 billion, and $11.25 billion respectively, for a total cost of $60.17 billion for property crime. Based on police statistics, the total cost for property crime will be $14.52 billion when no discounting on worries is used.

Another example of differences in assumptions leading to much higher estimates is a calculation of costs based on fatal injuries. According to Viscusi (1993), the average cost of fatal injuries can be as high as $9.6 million per victim (compared to only $72,000 per victim for non-fatal injuries). If the cost of violent crimes is calculated based on the upper bound of fatal injuries, then the cost of pain and suffering from violent crimes will be a phenomenal $7.47 trillion based on GSS data and $1.53 trillion based on police statistics. From these two examples, it can be concluded that it is important to perform at least some sensitivity analysis for comparison purposes. The estimates change significantly when different assumptions are applied.