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The Non-Linear Effect of Wealth on Crime

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Author Info

  • Chihiro Muroi

    ()
    (Department of Economics, College of the Holy Cross)

  • Robert Baumann

    ()
    (Department of Economics, College of the Holy Cross)

Abstract

Although theory suggests the relationship between crime and wealth is ambiguous, most empirical analyses estimate a monotonic relationship and find that wealth has negative effect on crime. Using two proxies for wealth (median income and poverty rate) and two types of crime (property and violent), we find a quadratic relationship is the best fit for our four crime-wealth groups. In general, the expected negative effect of wealth on crime only applies to wealthier counties. In poorer counties, wealth has an unexpected positive effect on crime. This result may be theoretically consistent, or an unintended byproduct of the Uniform Crime Reports data, which do not include unreported crime.

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File URL: http://college.holycross.edu/RePEc/hcx/Muroi-Baumann_Crime.pdf
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Bibliographic Info

Paper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 0907.

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Length: 21 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:hcx:wpaper:0907

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Keywords: crime; wealth; Uniform Crime Reports;

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References

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  1. Lance Lochner, 2004. "Education, Work, And Crime: A Human Capital Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 811-843, 08.
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  13. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "Inequality and Violent Crime," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 1-40, April.
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Cited by:
  1. Malik, Zahra & Zaman, Khalid, 2013. "Macroeconomic consequences of terrorism in Pakistan," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 1103-1123.

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