NEW YORK, (Reuters) – Crime doesn’t pay is a familiar adage. But it certainly costs.
A series of original studies commissioned by the Inter-American Development Bank (IDB) quantify the costs of crime and violence in Latin America and the Caribbean using a combination of crime, health and economic statistics to come to fresh conclusions.
In Brazil, one study found people pay an extra $13 billion to gain a sense of security alone, while in Uruguay economic activity suffers a negative impact of more than 3.0 percent of gross domestic product, while long-term generational impacts are found on the health of babies born to mothers who suffer from physical violence.
“People pay for a sense of security,” said David Vetter, lead author of a study examining the impact on residential property values in Brazil’s metropolitan areas of insecurity resulting from crime.
“There are a lot more people who are afraid of crime rather than are victims of crime,” Vetter told Reuters in a telephone interview.
A common theme running through the eight research papers presented is that women, children and families in general are affected most by crime and violence.
The IDB points out that the region suffers from some of the world’s highest homicide rates and is where 20 of the world’s most violent cities are located.
However, International Monetary Fund projections show Latin America and the Caribbean region’s economic growth of 3.6 percent this year is more than double the 1.4 percent forecast for advanced economies and above the 3.5 percent predicted for the world overall. That kind of growth masks somewhat the impact of crime and violence on the economies in the region.
HOUSING
In Vetter’s study, housing costs in Brazil are inflated by $13.6 billion, based upon a “strong and significant relationship between monthly rent and the sense of security in the home.”
Increasing the sense of security in the home from 40.9 percent to 59 percent (or one standard deviation) would increase home values by $757 if divided amongst all 18 million households in the study area.
“The implications of crime on the region’s wellbeing are potentially much greater. Violence not only victimizes individuals – it undermines trust in public institutions,” Ana Corbacho, an economist with the IDB’s Institutions for Development division, said in a statement.
The IDB solicited academic studies to measure the cost of crime and received 117 proposals from 19 countries. The authors of eight out of nine research studies that won funding are presenting their results at an IDB seminar in Washington Jan. 24-25.
“Latin American and Caribbean citizens cite crime and violence as their top concern, above unemployment, healthcare and other issues,” the IDB said in a statement.
NARCO-VIOLENCE
Much of the violence in the region can be ascribed to the narcotics trade.
A drug war raging in Mexico has led to a decline in economic activity in the municipalities where narcotics related violence is most prevalent, another study found.
Last month, Mexican Attorney General Jesus Murillo estimated that some 70,000 people had died in drug-related violence under former President Felipe Calderon, with roughly 9,000 bodies unidentified.
The explosion of violence seven years ago between rival drug gangs and the government crackdown on traffickers serves as a demarcation point for economic growth.