| NEW YORK
NEW YORK Jan 24 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
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
"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
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.
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.
"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.
Much of the violence in the region can be ascribed to the
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
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.
Using electricity usage rates as a proxy for economic growth
in Mexico, researchers at Stanford University found that
starting in 2006 the level of econonomic activity between
municipalities experiencing heavy narcotics-related violence and
those that did not diverged dramatically.
In the 2006-2010 time period, areas where drug crimes were
higher ended up lagging less violent areas by 6.8 percent per
A second study on Mexico by economists at the University of
Maryland, Instituto Tecnologico Autonomo de Mexico and Stanford
University found a 1.0 percent increase in the number of
homicides resulted in a 1.8 percent decline in home prices in
As a consequence of violence in Uruguay, the cost to the
economy was $1.2 billion a year, or 3.1 percent of GDP.
WOMEN AND CHILDREN FIRST
One common theme running through the studies focused on
health and social issues is the significant impact on women and
children from crime and violence and the long-term generational
effects on health, education and spending on prescriptions.
"Children whose mothers suffer from physical violence have
worse health outcomes," said researchers at the University of
In their study of domestic violence against women in the
demographic and health surveys of Colombia, the Dominican
Republic, Haiti, Honduras and Peru, the researchers found the
negative effects on children under the age of six takes place
even before they are born.
A women aged between 15 and 49 who suffers from domestic
abuse is less likely to have the four required prenatal visits
with a doctor. The children, once born, are more likely to have
had diarrhea in the last 15 days and tend to have a lower
weight. Vaccinations are reduced and height is stunted among
these children, the study found.
In a separate study, pregnant women in Brazil are more
likely to give birth to underweight babies if they live in high
crime areas and are themselves poorly educated.
"This suggests that violence adds up to the mechanisms that
affect the transmission of socioeconomic status between parents
and their offspring," wrote researchers at the University of
Leicester and Queen Mary University of London.
(Reporting By Daniel Bases)