Discussion Document 9

South Africa has a reputation for having high levels of crime, and a strained capacity to implement effective law enforcement. The repercussions of high crime rates are significant in an economy. If citizens are fearful of theft or working and travelling at night, activity is inhibited, consumers may buy less, and production and employment may be forced to scale back. The spatial nature of crime and people’s access to security can impact where people choose to buy houses and influence the value of properties. 

• How can crime and its impacts on the economy be modelled? Is a cost-benefit analysis sufficient, and if so, which city characteristics, costs and benefits ought to be included?  
• What is the relationship between the likeliness and severity of punishment, and levels of equality? And which mechanisms are most effective at combatting crime? 
• How many resources should be allocated towards crime prevention, and how can incentives for criminals be managed? 
• Is there an optimal level of crime? As one of the most destructive social problems facing a city, should we strive to have zero crime? 
• What can we learn from the increase in homicides in 2008-2011 in Mexico that resulted from the government’s war on organised drug traffickers? And how does the discovery of a meth lab influence property prices? And how does childhood exposure to violence influence their future? 

This research discusses theoretical frameworks and applied research on crime and its impact on cities. After explaining Becker’s 1968 work and extensions thereon, it explores the impact of crime on urbanicities such as business activity, customer behaviour, mobility and the value of properties. This research has implications for policy makers. From a policy perspective it is important to understand the costs of crime. It also outlines the direction of future research in this regard.