Impact of Crime on Small Businesses Report 2008 - Gauteng Online

THE IMPACT OF CRIME ON SMALL BUSINESSESBusinesses surveyed had experienced an average <strong>of</strong> 1.36 incidents <strong>of</strong> crime duringthe previous year. The figure was slightly higher for inner city businesses, at 1.7.Firms in townships and informal settlements reported a slightly lower figure, averagingone incident in the past year. In areas perceived as high crime, the averagenumber <strong>of</strong> incidents in the past year was 1.9, compared to 1.1 in moderately highcrime areas and 1 in low crime areas. Larger businesses reported more crime incidentsthan did smaller firms, as can be seen in Table 5.Table 5: Average incidence <strong>of</strong> crimeR3m0.5 0.6 1 1.4 2.2 3.6 1.9The results also showed some variation across sub-sectors, with fixed retail premisesand construction businesses reporting higher than average crime incidents (1.8and 1.7 respectively).4.2 Firm characteristics and crimeOur analysis includes an assessment <strong>of</strong> the characteristics associated with businessesaffected by crime, and <strong>of</strong> whether a similar set <strong>of</strong> characteristics are associatedwith the number times a firm is affected by crime. Column 1 in Table 6 presentsthe results <strong>of</strong> a probit estimation. The dependent variable is whether a firmhas experienced a crime incident in the past 12 months. The results suggest thatthose firms which report that they are situated in a high crime area are 28 percentmore likely to be affected by crime than those in a low crime area. Firms in moderatecrime areas are 14 percent more likely to be affected by crime than those in lowcrime areas. This cannot be interpreted as a causal relationship however – firmsthat are affected by crime may be more likely to report that they are in a high crimearea than those that are unaffected.Whether a business operates from the inner city, a township or a suburban area appearsto make little significant difference on whether a firm experiences an incident<strong>of</strong> crime. However, Cape Town firms are more likely to have experienced a crimethan firms in either Johannesburg or Durban. 15 Across size bands, businesses withmore than R800 000 turnover are more likely to have been affected by crime thanthose with turnover <strong>of</strong> less than R800 000.31