Homicide—‘injuries inflicted by another person with intent to injure or kill, by any means’ (WHO, n.d.)—places a heavy economic burden on societies that experience this form of violence.¹ Family and friends suffer when a loved one is killed, but their community and society also pay the price. The impact of homicide is physical, social and psychological, and also economic, and its costs are both direct and indirect.² As one journalist put it, ‘[t]he tab for taxpayers and society starts running as soon as a bullet strikes someone, from detectives on the street and trauma surgeons at the city’s public hospital to months of rehab for victims and years of court proceedings for the accused’ (Jones and McCormick, 2013). This chapter calculates the direct costs of homicide by estimating the economic loss to society.

Attempts by policy-makers, practitioners, and scholars to establish evidence of the diverse impacts of violence in general, and of homicide in particular, cover a wide range of issues, such as loss of life and health (victims and victimization), the undermining of trust in institutions and security providers (perceptions and attitudes towards the justice system and its institutions), and the direct costs generated by different forms of violence. All of these form part of the social cost of homicide. Estimates of the direct costs of homicide represent the potential material benefits to the wider society of reducing this form of violence.

Figure 5.11 Per capita GDP gains in the absence of firearm-related homicide, 2000–10

^{Source: CERAC (2014a)}

This chapter focuses on the economic loss to society of homicide and the benefits of reducing it, using two key concepts: ‘excess homicide’ and average life expectancy. The first refers to an ideal situation in which violence is rare and people can expect to live without the fear of meeting a violent death. Excess homicide is the difference between a ‘normal’ or ‘natural’ level of homicide (see Box 5.1)³ and the incidence of homicide observed in reality. By comparing average life expectancy in 105 countries for which age and sex-disaggregated data is available,⁴ with the life expectancy these countries would have had in the absence of excess homicide, it is possible to estimate how many more months on average people would have lived in a context of a ‘normal’ level of homicide. The economic impact⁵ is calculated on the basis of how much more the victims of homicide would have contributed to the economy during those additional months.

Figure 5.13 Gains in life expectancy in the absence of firearm-related homicide expressed in months, 2000–10

^{Source: CERAC (2014a)}

Before presenting the main findings it is important to highlight a few points regarding the methodology, data coverage, and calculations used in this chapter. First, since the data required in order to calculate the economic cost of excess homicide needs to be disaggregated by the sex and age of the victims, and the means used to murder them, this chapter does not use the database employed in other chapters in this edition of the Global Burden of Armed Violence (GBAV).

Second, since income and economic productivity vary greatly from one country to another, so does 154 GLOBAL BURDEN of ARMED VIOLENCE 2015 the absolute cost of homicide. For example, an increase in the number of homicides in Singapore, where the per capita income in 2012 was USD 54,007, will cost more in absolute terms than a similar increase in Afghanistan, where per capita income in 2012 was only USD 688 (World Bank, 2014a). In this sense, the murder of a Singaporean has a higher cost in absolute terms than the murder of an Afghan. It is important to underline here that the economic cost in monetary terms has no bearing on the value of a human life, merely that in absolute terms the forgone income depends on the country’s wealth.

The chapter finds that:

• In 2010 alone, the global cost of homicide was estimated at USD 171 billion, roughly the equivalent of Finland’s GDP that year.
• The estimated cost of homicide in absolute terms varies in response to global economic fluctuations. The global cost of homicide was thus USD 160 billion in 2000, USD 201 billion in 2004, and USD 171 billion in 2010.
• Although there has been a decline in excess homicide in recent years, both in absolute and in proportional terms, its cost is increasing.
• Excess homicide claimed almost 3 million lives between 2000 and 2010, which is roughly the equivalent of the population of Jamaica.
• If the global homicide rate between 2000 and 2010 had been reduced to ‘normal’ or ‘natural’ levels, the estimated savings would have amounted to some USD 1.984 trillion, roughly equivalent to 2.64 per cent of global GDP in 2010.
• The elimination of global excess homicide in 2010 would have extended per capita life expectancy by 7 weeks and added the equivalent of USD 29 to each person’s annual income.
• The victim’s sex is a more significant determinant than age or income of the economic cost of homicide.
• Although they do not account for the largest number of homicides, upper middle-income and high-income countries (UMICs and HICs)⁶ experience the greatest economic costs of homicide in absolute terms and therefore stand to reap the largest absolute economic gains from reducing it.

 

^{1 Due to the lack of available data for many countries, most of which are in sub-Saharan Africa, the sample used in this chapter covers only 105 countries, which together account for about 71 per cent of the total global population. Unless otherwise stated, the terms ‘global cost’ or ‘global population’ refer to this proportion of the total global population for which there is reliable data on homicide rates, life expectancy, and per capita GDP between 2000 and 2010. For this reason, some figures for homicide rates and population differ from the data cited in the other chapters, because they employ a different sample size. See the methodological annexe for a complete list of the countries included in this survey.
2 Direct costs are the actual or potential economic value lost due to homicide, usually using income or economic value of production as the basis of calculation. Indirect costs refer to a subjective valuation of the impact of violence on society, for example of the fear engendered by homicide, which is difficult to express in monetary terms, but has an impact on the affected family and community; similarly, the stress a pregnant woman experiences if her baby is endangered by violence, which can be estimated precisely, is difficult to value (see Camacho, 2008). Another way to approach indirect costs is to calculate the costs of containing violence, which have been estimated by the Institute for Economics and Peace (IEP) at USD 9.46 trillion a year (IEP, 2014), although this figure tends to double count elements of security and justice provision.
3 ‘Estimating the cost of homicide’ discusses the ‘natural’ homicide rate in more depth.
4 See Endnote 1.
5 For the methodological details on how the monetary value of lives lost and reduced life expectancy are calculated see CERAC (2014b).
6 The 105 countries are broken down into four categories according to national income levels. Lower middle-income countries (LMICs) are with a per capita GDP between USD 976 and USD 3,855 (16 countries); upper middle-income countries (UMICs), with a per capita GDP between USD 3,855 and USD 11,905 (37 countries); high-income countries (HICs) that are OECD members, with a per capita GDP above USD 11,905 (29 countries); and non-OECD HICs (23 countries). The categories do not correspond to geographical regions: there are countries in Africa, Asia, Europe, and Latin America in almost every different income level.}