TD n. 600 2012

Daniel Ricardo de Castro Cerqueira, Rodrigo Reis Soares.

This paper estimates the health dimension of the welfare cost of homicides in Brazil

incorporating age, gender, educational, and regional heterogeneities. We use the marginal

willingness to pay approach from the “value of life” literature to assign monetary values to the

welfare cost of increased mortality due to violence. The results indicate that the present

discounted value of the welfare cost of homicides in Brazil corresponds to roughly 78% of the

GDP or, measured in terms of yearly flow, 2.3%. The analysis also indicates that reliance on

aggregate data to perform such calculations, without taking into account the relevant dimensions

of heterogeneity, can lead to biases of the order of 20% in the estimated social cost of violence.