Cost of crime in Russia: A compensating variation approach

The paper estimates the cost of crime in Russia through an indirect approach. Using a national victimization survey, we estimate the elasticity of life satisfaction with respect to victimization and income. With estimated elasticities, we calculate the compensating variation: the increase in household income which would compensate for the decrease in life satisfaction due to victimization. Assuming strict exogeneity, one crime costs 135.2 thousand rubles ($2190), and the total societal cost amounts to 1.75 trillion rubles ($28.3 billion) of annual household income (1.3% of GDP).