Download the IEB Report 3/2017
The Institute of Economics of Barcelona (IEB) has published its latest edition of the IEB Report entitled ‘The Economics of Crime: State of the Art and Current Challenges’, which is dedicated to the analysis of the costs of criminal activity and the use of new technologies and big data for solving crime. “In the context of the need to generate multidisciplinary knowledge about the issue of crime, by drawing on the tools of hard science, economists have, for more than half a century now, focused on the task of trying to understand this complex phenomenon”, highlights IEB researcher and the Report’s editor, Daniel Montolio.
In this process, social networks and big data have established themselves as two fundamental elements for the identification of the causes of criminal activity and the solving of crime. This is the point highlighted by Juan Carlos Duque, a member of the group Research in Spatial Economics (RiSE), in his article ‘The Use of Social Networks and Big Data in Academic Studies of Crime’: “Globally, in January 2017, it was estimated that there were 2,789 billion active users of social networks, that is, 37% of the world population, offering a valuable source of information about user profiles, preferences, locations, daily activities and perceptions, etc.”. Duque reports that these new sources of information provide “answers to new research questions that, without the existence of these new sources of information, would be difficult to answer”.
Duque also describes the use of big data for identifying the causes of criminal activity. He does so by returning to the research work conducted by the academic Jorge E. Patino in ‘Remote Sensing-Based Measurement of Living Environment Deprivation’, which takes advantage of the real-time information provided by such applications as Google Street View and Waze and relates these insights to the murder rates in the city of Medellín, as well as to the socioeconomic statistics from censuses and quality of life surveys. Thanks to satellite imagery, the report identified the city’s ‘organic’ and ‘geometric’ urban structures to demonstrate that the most disordered urban designs are directly associated with higher murder rates. This same methodology has been used in recent years for the spatial delimitation of informal neighborhoods in cities that include Buenos Aires (Argentina), Recife (Brazil) and Liverpool (United Kingdom).
Big data for crime prediction
Professor Paolo Buonanno, from the University of Bergamo, stresses the importance of big data in his article ‘The Importance of Data for Crime Analysis’. Buonanno refers to several cases in which information management has been used for the purposes of crime prediction. "Technological innovation within the police force has made it possible to predict offenders’ behaviour. Having access to detailed information regarding when and where crimes are likely to occur is priceless in the prediction and forecasting of crime”.
By way of illustration, Buoanno reports that “several police departments both in the US and elsewhere in the world have begun to exploit the enormous informative content of crime data for predictive purposes. This technological revolution is crucial for designing public policies, since it can contribute to a more efficient spatial and temporal allocation of police resources”.
The costs of crime
Another branch of the economics of crime is the quantification of the costs of criminal activity, and it is in this specific area that the contribution from Inter-American Development Bank (IDB) researcher, Laura Jaitman, lies: ‘The Costs of Crime in Latin America and the Caribbean’. According to the author’s statistics, the countries of Latin American are home to less than 9% of the world’s population, but they account for 33% of the world’s murders, with an annual murder rate of 24 per 100,000 inhabitants. This figure is four times higher than that of the world average and 20 times that recorded in Spain.
Jaitman draws on the literature in the field to identify three types of coats attributable to crime: i) public spending on security, including police services, criminal justice and prisons; ii) spending on the security services provided by private firms; and, iii) the social costs of crime, including the income foregone due to victimisation and the income that the prison population ceases to generate.
Here, estimates show that crime is costing the countries of Latin America and the Caribbean 3.5% of their GDP – in strictly monetary terms that represents 236 billion US dollars or 300 dollars per capita/country. “This amount is equivalent to what the region spends annually on infrastructure, roughly equal to the income share of the poorest 30% of the population”, calculates the researcher. Likewise, expenditure on crime prevention is much higher than in other parts of the world. “The region has 300 police officers per 100,000 people, compared to 200 in the United States.”
Jaitman’s report also provides details on which countries in the region have the highest crime-related costs. Figures vary over the continent: so while the economic cost does not reach 2% of GDP in Mexico, it exceeds 6% in countries like Honduras and El Salvador.