Valuing Intangibles using Subjective Wellbeing Data - The Case of Violent Crime
Valuing public amenities, pain and suffering, and other non-market goods is a common but challenging task faced by applied economists. Existing methods include inferring shadow prices from market data, and contingent valuation surveys in which people are asked directly about their willingness to pay. This presentation discusses a complementary approach based on the use of subjected wellbeing data, and demonstrates its use by estimating the costs of violent crime victimisation in Australia. The total cost of violent crime for victims includes direct costs, such as lost wages, medical care costs and property damage, and intangible and potentially long-term costs associated with pain, psychological distress, and decreases in quality of life. We estimate that the amount of monetary compensation required by victims to offset their loss of wellbeing is $88,000 for the average victim, with the amount being greater for females ($102,000) than males ($79,000).