Association for Public Policy Analysis & Management

White-collar crime is one of the least understood of all crimes. While reliable evidence is sparse, the costs and consequences of white-collar crime likely exceed that of street crime. To date, virtually all evidence on the cost of white-collar crime is necessarily limited to direct victim losses. Yet, we know that many victims of white-collar crime are harmed in other ways, including time spent dealing with financial or legal institutions, mental anguish, distress and even severe psychological harm in some cases. In addition, consumers and businesses might take costly precautions to avoid victimization, while government agencies and law enforcement officials spend taxpayer dollars responding to white-collar crime. Despite the lack of solid evidence on the cost of white-collar and corporate crime, the need for such data is growing, specifically for regulatory agencies which are often required to conduct cost-benefit analyses of proposed rulemaking.

This paper analyzes data from the first nationally representative survey of 2,000 U.S. adults to gather new (more comprehensive) evidence on the cost of white-collar and corporate frauds, specifically regarding how the public’s willingness-to-pay (WTP) for crime reduction varies for certain policy alternatives such as civil versus criminal adjudication, as well as for information provided on factors including details of the offense, offender, victim, and the institutional approach to handling the offense.