The economics of private security expenditure: The influence of perceptions of crime

Abstract

Given that crime is a complex societal problem, the argument to embrace interdisciplinary scholarship seems an obvious one. The study of crime and its control, however, has largely remained multidisciplinary in nature. In this article, we provide an interdisciplinary, accessible economic model for understanding choices by individuals, as well as demonstrate the application of self-reported life satisfaction data to the issue of property crime. We find that: individuals' perceptions of crime in their local area are far greater than actual levels of crime; the gap between perceived and real crime is widening; and real crime rates detract more from an individual's self-reported life satisfaction than perceived rates of crime. However, perceived rates of crime have an adverse impact on life satisfaction beyond those associated with real crime. Together, these results suggest that societal welfare could be significantly enhanced by reducing individual's perceptions of crime, irrespective of any changes in the real crime rate.