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The cost of crime

Aug 15 2018 11:58
Johan Fourie

Johan Fourie is associate professor in economics at Stellenbosch University.

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This reality almost defines South Africans: Having lived through the traumatic experience of a violent crime or, at the very least, knowing someone who has. 

South Africa had 19 016 murders in 2016/2017, according to the South African Police Service (SAPS), or 34.1 murders for every 100 000 people. In contrast: Afghanistan is at less than 7 murders per 100 000 people; Argentina at less than 6; Kenya at less than 5; India at less than 4; Iran at less than 3; and Ghana at less than 2.

Almost the same number of attempted murders were reported to the police. On average, 109 men and women were raped each day, and there were 22 343 incidents of house robberies recorded, or 61.2 each day.

These statistics explain why most South Africans list crime as their number-one concern – far above access to land or the country’s level of inequality – and why those that decide to emigrate list “improved safety and security” as the top reason for leaving. 

One would then expect that safety and security would be a top research priority at South African universities.

It’s not. A 2017 World Bank study by leading social scientists reports: “There is a dearth of research on crime in South Africa, which is particularly problematic in this country given the extraordinary high crime rates reported here.” 

The study begins to fill the gap, but the results show why understanding the causes of criminal behaviour is so difficult.

Surely poverty is the most obvious explanation? Well, the province with the second-highest murder rate is the Western Cape (51 murders per 100 000 people), and the lowest is Limpopo (14 murders per 100 000 people). 

The Western Cape is, of course, much more affluent than Limpopo. 

This suggests that poverty is not the main reason for crime. 

Perhaps it’s inequality? But using a sophisticated regression analysis, the authors of the World Bank study conclude that “we did not detect any relationship between inequality and violent crime, nor between unemployment and any crime type”.   

So then what? 

We know that the victims of most violent crimes often know the perpetrator. The 2016 Demographic and Health Survey reveals that 17% of women aged 18 to 24 had experienced violence from a partner in the 12 months before the survey. 

Economists in the US have developed sophisticated household bargaining models to explain this form of violence, but more could be done to test these models in the local context. 

Even less is known about the consequences of violent crime. 

The costs of a traumatic experience can be multifaceted for the victim, from direct medical costs to lifelong psychological and emotional pain.

And the effects on family and friends, their relationships and interactions, productivity and future plans, are enormously difficult to quantify.

A recent working paper by the US National Bureau of Economic Research (NBER) attempts to measure one, often forgotten, cost of domestic violence: the effect on children in utero. Because crime statistics are difficult to get past university ethics committees, it’s difficult to track the victims of crime over time in order to measure the effect of the traumatic experience on later-life outcomes. 

The three authors of this study, Janet Currie, Michael Mueller-Smith and Maya Rossin-Slater, use a unique source of linked administrative data from New York City. 

They combine birth records, with information on maternal residential addresses, with the exact locations and dates of reported crimes to compare the outcomes of women who have  reported assault in their home in the months post-conception, to those who experience an assault 1 to 10 months after the estimated due date.

Their results are startling. Babies of women who suffer from domestic violence during pregnancy, especially during the third trimester, have as much as 50% higher rates of very low birth weight (less than 1.5kg) and are often pre-term (less than 34 weeks gestation). 

The likelihood of induced labour also increases.

The authors do a back-of-the-envelope calculation of the costs of US domestic violence. “We calculate an average social cost of $41 771 per assault during pregnancy. Assuming that 2.6% of pregnant women experience an assault – the national victimization rate estimated from survey data – this figure translates into a total annual social cost in excess of $4.25bn.”

Many might balk at trying to put a number on these experiences, but quantifying the costs of domestic violence is one way to help governments prioritise preventative and remedial expenditures. 

The high rates of domestic violence in South Africa, particularly of women during their most fertile years, suggests that the costs of domestic violence would be significantly higher here compared to the US.

And because domestic violence is more likely to be suffered by women from poor households, this may suggest “an important and previously understudied mechanism by which early-life health disparities perpetuate persistent economic inequality across generations”.

Violence, in all its manifestations, is costly for society, which is why we should invest more resources into understanding its causes and consequences.

Domestic abuse, in particular, seems to carry not only a cost for the current generation, but is likely to affect the next generation through its intergenerational effect on children in utero. Understanding and preventing it may be key to fighting deepening inequality and poverty persistence.

Johan Fourie is associate professor in economics at Stellenbosch University.

This article originally appeared in the 16 August edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.


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