Monday, 11 April 2011

The Opportunity of Peace for the United States

So after many months of hard work and high anticipation (and yes, I will admit, some nervousness) we released the United States Peace Index (USPI) at the National Press Club in Washington D.C. this week. The response, both from the media and the general public has been pleasingly positive and we even made the front page of Yahoo News, in between plastic surgery and spring hairdos articles – peace is reaching new audiences!

The USPI, produced by the Institute for Economics and Peace (IEP), is a study into the state of peace in the United States. It ranks the 50 American states by their levels of peacefulness detailing the large differences between states, and the significant drag that violence has on the United States economy.

Many argue the U.S economy is no longer able to afford a continuation of long term deficit spending, but few talk about one of the largest contributors to the long term budget deficit– the growing cost of violence.

Higher rates of violent assault, robbery, homicide, incarceration, and number of police officers translate into significant dollar amounts of lost economic activity. By measuring the medical cost and value of lost productivity from these forms of violence as well as the cost of correctional services, robbery, and judicial costs associated with crime, it is possible to measure the immediate cost of violence to the community.

The economic benefits are significant enough to show if the least peaceful U.S states were moderately more peaceful, say to the level of neighboring Canada, the country could generate more than $270 billion of additional economic activity. This level of additional economic activity could generate some 2.7 million jobs, effectively lowering the U.S unemployment rate by 20%. This economic stimulus would be worth significantly more than the tax relief provided in the American Recovery and Reinvestment Act of 2009.

The cost of violence data is supported by studies from the Centers for Disease Control, showing for each violent assault resulting in hospitalization, the average medical cost is in the region of $30,800, while productivity costs through the lost work time of the victim and those around them to be over $72,000. Likewise, the average cost to the state of incarcerating a person in the U.S. is $34,700 a year – not including the lost income tax revenue and productivity an employed person’s wage would have contributed to the economy during incarceration. These amounts exceed the average annual tuition fee for an MBA at a typical prestigious American university.

The economic cost of violence is also reinforced in a vicious cycle. As states incarcerate more individuals, greater proportions of discretionary spending is committed to judicial costs and correctional services, away from education, health and basic services. Poorer educational attainment then potentially leads to more violence in later years. This is clearly seen in states like California that spend significant amounts on correctional services and have had to recently make painful cuts to education funding. As a result, California today spends more on its prison system than it does on its higher education system.

This is without even counting several other expenses caused by violence or the fear of violence, such as higher insurance premiums, surveillance cameras, security guards, lost management time, the private legal costs associated with police and judicial proceedings. As a result, it is expected the true cost of violence would in fact be even greater.

While it is evidently desirable to lower violence in society, few studies have attempted to comprehensively analyze the true economic cost of violence at the state level in the United States. It is hoped by doing so lawmakers will see that reducing violence should not be seen as a subset of responsibilities for respective state Attorney Generals, but rather a key part of the nation’s economic policy.

The economic benefit of peace is clear – but why measure it and how is it measured?
While peace is a notoriously difficult term to define, the Index used a definition most people can agree with “the absence of violence”. Violence in our communities is often seen as a result of poor socialization, social alienation and deprivation, while the emotional outbursts associated with violent acts are often the result of unrealized expectations, failed relationships and a sense of frustration about immediate social and economic pressures. In this sense, the rate of violence can be seen as a proxy for social progress, as it can be reasonably accepted a society with people increasingly at war with each other on the interpersonal level, cannot be said to be a happy, successful or progressing.

The USPI is the first in a series of national indices that will produced by the IEP measuring levels of peacefulness within a nation by ranking regional areas and states by their levels of peacefulness. The composite measure of peace is calculated through aggregating five weighted indicators – Rate of Violent Crime, Rate of Homicide, Rate of Incarceration, Number of Police Officers and Availability of Small Arms.

Using data from the Federal Bureau of Investigations, the Census, the Centers for Disease Control, and Bureau of Justice Statistics, the U.S. Peace Index aggregates a ‘peace’ score for each state from 1991 to 2009. Each state is then ranked by score, with lower scores reflecting a lower incidence of violence.

Overall, the USPI brings good news, showing from 1991 to 2009, the U.S has become more peaceful, with lower rates of violent crime, homicide and availability of small arms. While the fall in violence has dramatically dropped to levels not seen since the late 60s and early 70s, international comparisons show, in almost all of these categories, the U.S lags behind most other developed nations. Notably, the peace trend has been significantly offset by increases in both the rate of incarceration as well as the per prisoner cost.

The top five most peaceful states are all in the North - Maine, New Hampshire, Vermont, Minnesota, and North Dakota (the full ranking is here). Since 1991, the rankings have been relatively clustered, with only 16 states being featured in the top 10, and 18 in the bottom 10.
The difference in scores between states highlights the large divergences between regions in terms of their relative levels of violence. These divergences in peace reflect the differences in social and economic outcomes as well as demographic differences. For instance, the state with the highest rate of homicide, Louisiana has 11.8 homicides per 100,000 people, whereas the state with the lowest, New Hampshire has a rate more than 11 times less at 0.75 homicides per 100,000. The divergences are similar with violent crime with Nevada’s rate of 696 incidents per 100,000 is some six times more than the lowest, Maine which has a rate of 117 incidents per 100,000.
The USPI shows these large differences are shared on critical social and economic indicators, as both Maine and New Hampshire have significantly higher proportions of their populations with at least a high school diploma, access to health insurance, access to basic services, along with lower teenage pregnancy rates, fewer children in single parent families and higher labor force participation rates. For instance, almost 30% fewer students graduate from high school in Nevada than do in New Hampshire.

To further the analysis, the USPI looked at how each state performed in over 37 key socio-economic indicators related to education, health, economic conditions, political attitudes and demographics. Of these 37 indicators, 15 were found to be statistically significant at the state level. This paints a clear picture of the type of environments associated with peace.

These included:
• the high school graduation rate
• the percentage of people with at least a high school diploma
• percentage of people without health insurance
• the teenage pregnancy rate
• teenage death rate
• percentage of children living in single parent families

Also including economic indicators such as;
• household income inequality
• the poverty rate
• perceptions of access to basic services
• the labor force participation rate.

Meanwhile, political affiliation, education funding per student and GSP per capita did not correlate with violence at the state level.
The upshot is – the better the outcomes in education and health, the lower the rate of poverty and income inequality, and greater the access to basic services, the more peaceful a state tends to be.

U.S. Peace Index - key correlations with violence

Incarceration not the only solution
The study finally suggests incarceration has not been achieving its principle aim of reducing violence. While there was a very strong relationship between decreasing violent crime and homicide rates alongside increasing incarceration during the 90s and early 2000s, that relationship has significantly diminished in the last ten years. This continued to the point whereby from 2004 to 2007, incarceration in fact increased alongside violent crime and homicide.
The data from the USPI suggest the way to move forward lies in directing investment towards outcomes that deliver equal opportunity, poverty alleviation and better outcomes in health and education.

The challenge now is to improve data collection and drive research that provides qualitative information further informing the relationship between violence and these social and economic indicators - not just in the U.S, but in the rest of the developed world as well. This can only become more pertinent at a time when the U.S is far from being the only developed nation facing serious budget constraints.

The economic cost of violence shows the strive for peace should not be an ideal simply confined to war-torn states in civil or cross border wars, but rather, a priority of all developed nations.

To download the full report, maps, charts and videos on the USPI, please visit the Vision of Humanity webiste. For more information on the Institute for Economics and Peace (IEP), please see the official IEP website.

Camilla Schippa and Daniel Hyslop

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