Economic Costs of Victimization

Abstract

Individuals change their behavior when they experience crime. When it comes to the consequences and costs of crime, many studies have explored the consequences for offenders and their families. For example, research in economics, building on Gary Becker’s economic model of crime, has traditionally focused on the determinants and risk factors influencing criminal behavior, modelling crime as a rational choice based on expected costs and benefits of criminal activity. In contrast, victims, including their social and economic costs of crime, have often been overlooked, even though they represent a substantial share of the population. In fact, victim-related costs, including those arising from behavioral changes, constitute a large component of the overall societal burden of crime, which is estimated to reach nearly 10% of the gross domestic product (GDP) in the United States and 4% to 7% of the GDP across European countries. The importance of victimization is recognized in the literature and there is a growing body of evidence when it comes to the behavioral responses to crime victimization. This entry describes how the cost of victimization is measured and behavioral responses to victimization, that is how individuals adjust their economic behavior after experiencing harm. In this entry, examples of behavioral responses are discussed that include responses in terms of health and well-being, precautionary behaviors, labor market behaviors as well as behavioral responses to crime exposure more generally, beyond individual victimization.