Economic Costs of White-Collar Versus Street Crime

Estimates of the public’s willingness-to-pay to reduce street crime demonstrate that the out-of-pocket losses to victims are only a small fraction of the total costs of crime – with monetized impacts such as pain, suffering, fear of crime and loss of social cohesion far exceeding any out-of-pocket monetary losses. At the same time, there is growing evidence that the out-of-pocket monetary losses from fraud and other forms of white-collar crime far exceed the monetary losses from street crime in the U.S. Yet, public resources devoted to preventing and punishing street crime far exceed those devoted to white-collar crime. To date, there is little or no evidence on the extent to which the public’s willingness-to-pay for reduction in white-collar crime exceeds the pure monetary losses – and hence, no way to compare the costs of white-collar to street crime. This paper provides a framework and initial estimates of the costs of white-collar versus street crime and identifies future research needs to assist policymakers in judging appropriate law enforcement resource allocations between street crime and white collar crime.