The Welfare Cost of Violence

Rodrigo R. Soares, University of Maryland

This paper draws on the "value of life" literature to estimate the loss of welfare caused by the violence observed in 73 countries of the world during the nineties. In the extreme case of Colombia, violence determines a reduction of 3 years in life expectancy at birth. For the U.S., violence reduces life expectancy at birth by 0.8 year. The social value of eliminating violence is estimated to correspond to 20% of the American GDP in 1995, and 113% of the Colombian GDP in that same year. Generally, a one-unit increase in the years of life lost due to violence is associated with an increase of 26% of the GDP in the social willingness to pay for violence reductions.