Maine is the most peaceful state in America, according to the 2012 U.S. Peace Index.

The index, which was released by The Institute for Economics and Peace, ranks states based on the prevalence of violent crimes, homicides, police employees, size of the prison population and small arms availability.

Maine, America's most peaceful state for the 11th year running, has recorded reductions in the homicide and incarceration category, as well as the number of police employees. Maine also has the least cost to taxpayers with violence costing $1,281.

According to the index, if all the states in the U.S. had the same level of peacefulness as the most peaceful state of Maine, $274 billion worth of extra economic activity could be generated. This additional economic activity would be enough to generate over 1.7 million jobs.

What the USPI shows is that over the past 20 years, America has become substantially more peaceful, witnessing a significant and sustained reduction in direct violence, said IEP founder and executive chairman Steve Killelea.

Homicide rates in the U.S. have halved since 1991 and the violent crime rate has also fallen by nearly half during the same period. The state level trends are also very encouraging. 42 states reduced their violent crime rates, and 13 out of 16 Southern states increased their peacefulness. Killelea added.

Ironically, the index also points America's least peaceful state for the 20th year running - Louisiana.

Louisiana is ranked last in the nation on homicides, equal last on incarceration and ranks in the bottom ten on the other three indicators.

In spite of this result, there is still some cause for optimism, as both the homicide and violent crime rate have fallen along with the incarceration rate.

According to the report, the average taxpayer pays $3,257 per year on violence and violence containment, while the total economic cost is $460 billion. The cost of violence includes the health costs of victims of violent crimes and homicides, incarceration costs and other factors.

Given the financial costs of incarceration, emphasis needs to be placed on programs that reduce the likelihood of reoffending or finding more cost effective ways that deal with non-violent offenders, Killelea said.

With Maine at the helm, here are the top five most peaceful states in America