1 Introduction
This paper summarises the results of, and methodology employed in, a project to estimate the costs of crime in New Zealand in 2003/04. These include the costs to society as a whole and the fiscal costs to the New Zealand Government.
Treasury has not previously prepared estimates of the costs of crime. We are doing so now as part of a wider project that seeks to develop more robust analysis of policy choices in the criminal justice system. If successful within the criminal justice sector, empirically-based techniques such as cost-benefit analysis could be extended to interventions in other areas of social policy that impact on criminal justice (such as health, education and family policy).
Empirically-based techniques are an increasingly important component of policy analysis. However, the requirement to estimate key parameters, and ongoing debate around estimation procedures, suggests that techniques such as cost-benefit analysis should inform rather than replace policy development and review processes. In particular, it is important to avoid partial approaches. For example, while a proposal might offer positive net benefits when assessed using empirical techniques, proceeding with it in isolation could preclude the adoption of a better alternative or involve unforeseen implementation risks.
The cost-benefit approach requires estimates of the benefits to society of policies that target reducing crime or improving the operation of the criminal justice system. These benefits include the cost of crime avoided as a result of a policy option. We are unaware of any recent estimates of the costs of crime in New Zealand. This paper summarises our efforts to prepare such estimates.
