The Hashomer Hachadash and Rifman Institute study estimates organized crime costs Israel about NIS 23 billion a year — roughly NIS 8,000 per household. Drawing on government data, researchers identify protection rackets, agricultural extortion and vehicle crime as major drivers of higher prices. The report calls for stronger enforcement, civilian regulation and economic measures to return stolen funds and reduce living costs.
Organized Crime Is Driving Israel’s Cost of Living — Study Says NIS 23 Billion Lost Annually
Chief of Police Daniel Levi at the scene of a shooting incident in Ramla, central Israel, May 11, 2026. (photo credit: YOSSI ALONI/FLASH90)
A new study by Hashomer Hachadash and the Rifman Institute for Negev Development finds that organized crime extracts roughly NIS 23 billion from Israel’s economy each year — the equivalent of about NIS 8,000 per household. The report, released Sunday, draws on data from the Finance Ministry, the Tax Authority and the State Comptroller.
Widespread Impact Across Key Sectors
Researchers say the rising cost of living in Israel is driven less by energy prices or global supply-chain disruptions and more by systematic criminal activity that permeates agriculture, construction, housing, vehicle markets and other industries.
Construction: Racketeering Raises Prices
In construction, protection rackets can consume up to 5% of a project’s budget. Developers and contractors typically pass those additional costs on to buyers and renters, contributing to higher apartment prices and upward pressure on rents nationwide.
Agriculture: Extortion Is Widespread
Fresh-produce prices have risen amid extensive extortion: about 93% of farmers in the Eastern Galilee and 90% in the Negev report threats or demands that affect production and pricing.
Young Israelis after completing their military service help a lychee farmer at sunrise during the peak of the harvest season at his lychee orchard in Moshav Almagor near the Sea of Galilee, June 25, 2026. (credit: MICHAEL GILADI/FLASH90)
Vehicles and Insurance
Higher rates of break-ins, thefts and vandalism have driven up motor insurance premiums by as much as 56%, further increasing household costs.
"The public in Israel is paying a double tax today, once to the state and a second time to criminal organizations," said Yoel Zilberman, founder and CEO of Hashomer Hachadash. "Anyone who thinks crime is only a matter of personal security must understand that it has become a driver for the cost of living."
Zilberman attributed the problem in part to a lack of effective governance and urged the state to act to reduce prices and return stolen funds to citizens.
Haggai Reznik, head of the Rifman Institute for Negev Development, called the findings evidence of a "deeper failure" and recommended a combined government response of strong enforcement, civilian regulation and economic tools to restore state authority and support development, growth and the periphery.
Recommendations and Next Steps
The researchers urge coordinated action: more robust law enforcement against organized crime networks, regulatory reforms to reduce vulnerabilities in affected industries, and targeted economic measures to relieve households and businesses burdened by these hidden costs.
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