Crime and Victimization: An Economic Perspective

The recent upward trend in crime rates of developing countries has spurred widespread public concern about personal and proprietary insecurity. In some countries, the questions of crime, violence, and victimization are attracting more attention from academics and policy makers than traditional economic problems. The objective of this paper is to examine the main issues related to crime and victimization from an economic perspective. For this purpose the paper combines a review of the main results established in the literature with original research on the causes of crime and the risk factors of victimization. The first section provides a review of the estimates of the costs of crime, the main theoretical and empirical research on its causes, and the relative advantages of official and survey data on crime. The second section presents original work on the main causes of violent crime from a cross-country perspective. The empirical work starts with a basic model of the economic determinants of homicide and robbery rates. In turn, this empirical model is extended along five dimensions: 1) deterrence factors, 2) illegal drug-related activities, 3) demographic issues, 4) income and ethnic polarization, and 5) social capital. The third section reviews recent case studies of Latin American cities that rely on survey data to assess the empirical determinants of the probability of victimization. These studies focus on three types of risk factors: 1) individual characteristics, 2) household characteristics, and 3) community characteristics. The main conclusions from the previous sections are summarized in section four.