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Inequality and Crime: Separating the Effects of Permanent and Transitory Income

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Author Info
Matz Dahlberg
Magnus Gustavsson

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Abstract

Earlier studies on income inequality and crime have typically used total income or total earnings. However, it is quite likely that it is the changes in permanent rather than in transitory income that affects crime rates. The purpose of this paper is therefore to disentangle the two effects by, first, estimating region-specific inequality in permanent and transitory income and, second, estimating crime equations with the two separate income components as explanatory variables. The results indicate that it is important to separate the two effects; while an increase in the inequality in permanent income yields a positive and significant effect on total crimes and three different property crimes, an increase in the inequality in transitory income has no significant effect. Using a traditional, aggregate, measure of income yields insignificant effects on crime. Copyright (c) Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2007.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0084.2007.00492.x
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Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics and Statistics.

Volume (Year): 70 (2008)
Issue (Month): 2 (04)
Pages: 129-153
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Handle: RePEc:bla:obuest:v:70:y:2008:i:2:p:129-153

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  5. Raphael, Steven & Winter-Ember, Rudolf, 2001. "Identifying the Effect of Unemployment on Crime," Journal of Law & Economics, University of Chicago Press, vol. 44(1), pages 259-83, April.
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  1. Ayse Imrohoroglu & Antonio Merlo & Peter Rupert, 2006. "Understanding the determinants of crime," Working Paper 0602, Federal Reserve Bank of Cleveland. [Downloadable!]
  2. Hallberg, Daniel, 2006. "Cross-national differences in income poverty among Europe´s 50+," Working Paper Series 2006:14, Uppsala University, Department of Economics. [Downloadable!]
  3. Chen, Jie, 2006. "The Dynamics of Housing Allowance Claims in Sweden: A discrete-time hazard analysis," Working Paper Series 2006:1, Uppsala University, Department of Economics. [Downloadable!]
    Other versions:
  4. Johansson, Fredrik & Klevmarken, Anders, 2006. "Explaining the size and nature of response in a survey on health status and economic standard," Working Paper Series 2006:2, Uppsala University, Department of Economics. [Downloadable!]
  5. Baharom, A.H. & Habibullah, M.S. & Royfaizal, R. C, 2008. "Convergence of violent crime in the United States: Time series test of nonlinear," MPRA Paper 11926, University Library of Munich, Germany. [Downloadable!]
  6. Ågren, Martin, 2006. "Prospect Theory and Higher Moments," Working Paper Series 2006:24, Uppsala University, Department of Economics. [Downloadable!]
  7. Engström, Per & Holmlund, Bertil, 2005. "Worker Absenteeism in Search Equilibrium," Working Paper Series 2005:22, Uppsala University, Department of Economics. [Downloadable!]
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  8. Baharom, A.H. & Habibullah, M.S., 2008. "Is crime cointegrated with income and unemployment?: A panel data analysis on selected European countries," MPRA Paper 11927, University Library of Munich, Germany. [Downloadable!]
  9. Baharom, A.H. & Habibullah, M.S., 2008. "Crime and Income Inequality: The Case of Malaysia," MPRA Paper 11871, University Library of Munich, Germany. [Downloadable!]
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