Willingness to pay for crime reduction: The role of information in the Americas?

Abstract

Crime levels are a perennial development problem in Latin America and a renewed concern in the United States. At the same time, trust in the police has been falling, and questions abound about citizens’ willingness to support government efforts to fight crime. We conduct a survey experiment to elicit willingness to contribute toward reducing crime across five Latin American countries and the United States. We compare homicide, robbery, and theft estimates and find a higher willingness to contribute to more severe crimes and for higher crime reductions. In addition, we examine the role of information on the willingness to contribute by conducting two experiments. While we document an 11 percent gap in willingness to pay for crime reduction between people who under and over-estimate the murder rate, we find that this gap can be wholly eliminated by informing respondents about the actual level of crime. We also show that exposing respondents to crime- related news increases their willingness to pay by 5 percent. On average, our estimates suggest that households are willing to contribute around $152 per year for a 20 percent reduction in homicide, representing an increase in security spending between 15 and 65 percent in Latin American countries (up to 0.5 percent of GDP).