New Study Tracks Lower Crime Costs
The cost of crime is going down in Nova Scotia, indicates a new study by GPI Atlantic, a non-profit economic research group based in Halifax.
The study shows that preventing and dealing with crime is costing Nova Scotians less than it was earlier this decade and considerably less than the national average. But the study also concludes that the true cost of criminal activity is largely misunderstood.
"The way we traditionally measure things, high crime rates are good for the economy," said Ron Colman, director of GPI Atlantic, which is working on a Genuine Progress Index, or GPI, as a new measurement of economic progress. "As more crimes are committed, more money is spent on prisons, courts, police, security systems and insurance settlements, and this all shows up as economic growth.
"We're looking at this from a different point of view. The GPI model sees higher crime rates as a liability not only to society, but also to the economy."
Current measures such as the gross domestic product, or GDP, count all financial transactions as indicators of economic growth. The GPI measures economic progress according to a balance sheet of assets and liabilities. Under this model, spending that contributes to well-being and prosperity is counted as an economic asset. Crime, pollution, road accidents and depletion of natural resources are regarded as liabilities. Unlike the GDP, higher crime rates decrease the GPI while lower crime rates are a sign of progress.
"We calculate that crime costs Nova Scotians about $1.2 billion, or $3,500 per household each year," said Dr. Colman. "These costs are 20 to 25 per cent lower than the Canadian average, and much lower than in the United States, where citizens are imprisoned at 11 times our provincial rate.
"If our crime rate were still at the lower 1962 level -- when Canadian crime statistics were made uniform -- we would be saving about $750 million a year, money that could be invested in education, reforestation programs or other positive activities."
The study also found that businesses must build the cost of crime into their prices. The average Nova Scotian household pays $800 more per year in higher prices to cover costs of security systems and guards, shoplifting and employee theft. In addition, insurance fraud costs each Nova Scotian household an extra $200 per year in higher premiums.
The study is the research group's third release of data for the GPI project. Previous studies have measured the economic value of voluntary services and unpaid household work. The next report will count the costs of greenhouse gas emissions in Nova Scotia.
The project strives to integrate economic, social and environmental indicators to give truer measurements of sustainable development within the province. This project, a first in Canada, has been designated as a pilot project by Statistics Canada.
The GPI crime cost study has been reviewed by Statistics Canada, the Canadian Centre for Justice Statistics, and independent researchers including Don Clairmont, a criminologist in Dalhousie University's sociology department. Core funding for GPI Atlantic has been provided by the Canada/Nova Scotia COOPERATION Agreement on Economic Diversification, which is managed by the Atlantic Canada Opportunities Agency and Economic Development and Tourism.
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