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Crime and Income Inequality: The Case of Malaysia

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Author Info
Baharom, A.H.
Habibullah, M.S.

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Abstract

This paper examines the causality between income inequality and crime in Malaysia for the period 1973-2003. Autoregressive Distributed Lag (ARDL) bounds testing procedure is employed to (1) analyze the impact of income inequality on various categories of criminal activities as well as to (2) analyze the impact of various categories of criminal activities on income inequality. Interestingly our results indicate that income inequality has no meaningful relationship with any of the various categories of crime selected, such as total crime, violent crime, property crime, theft and burglary. Crime exhibits neither long-run nor short run relationships with income inequality and they are not cointegrated. It cannot be denied that there is ambiguity in the empirical studies of crime economics regarding various income variables leading to often mixed and contradicting results, which might be a good explanation of this finding.

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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 11871.

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Date of creation: 10 Sep 2008
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Handle: RePEc:pra:mprapa:11871

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Related research
Keywords: Income inequality; crime; bounds testing; Malaysia;

Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
E00 - Macroeconomics and Monetary Economics - - General - - - General

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  1. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "Inequality and Violent Crime," Journal of Law & Economics, University of Chicago Press, vol. 45(1), pages 1-40, April.
  2. Mehanna, Rock-Antoine, 2004. "Poverty and economic development: not as direct as it may seem," The Journal of Socio-Economics, Elsevier, vol. 33(2), pages 217-228, April. [Downloadable!] (restricted)
  3. John Chisholm & Chongwoo Choe, 2005. "Income variables and the measures of gains from crime," Oxford Economic Papers, Oxford University Press, vol. 57(1), pages 112-119, January. [Downloadable!] (restricted)
    Other versions:
  4. Matz Dahlberg & Magnus Gustavsson, 2008. "Inequality and Crime: Separating the Effects of Permanent and Transitory Income," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(2), pages 129-153, 04. [Downloadable!] (restricted)
    Other versions:
  5. Choe, Jongmook, 2008. "Income inequality and crime in the United States," Economics Letters, Elsevier, vol. 101(1), pages 31-33, October. [Downloadable!] (restricted)
  6. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326. [Downloadable!]
  7. Ayse Imrohoroglu & Antonio Merlo & Peter Rupert, 2006. "Understanding the determinants of crime," Working Paper 0602, Federal Reserve Bank of Cleveland. [Downloadable!]
  8. Vladimir K. Teles, 2004. "The Effects of Macroeconomic Policies on Crime," Economics Bulletin, Economics Bulletin, vol. 11(1), pages 1-9. [Downloadable!]
  9. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-65, May-June. [Downloadable!] (restricted)
  10. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169. [Downloadable!] (restricted)
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  11. Narayan, Paresh Kumar & Narayan, Seema, 2005. "Estimating income and price elasticities of imports for Fiji in a cointegration framework," Economic Modelling, Elsevier, vol. 22(3), pages 423-438, May. [Downloadable!] (restricted)
  12. Lorenzo Blanco & Sandra Villa, 2008. "Sources of crime in the state of Veracruz: The role of female labor force participation and wage inequality," Feminist Economics, Taylor and Francis Journals, vol. 14(3), pages 51-75. [Downloadable!] (restricted)
  13. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "What causes violent crime?," European Economic Review, Elsevier, vol. 46(7), pages 1323-1357, July. [Downloadable!] (restricted)
  14. Chiu, W. Henry & Madden, Paul, 1998. "Burglary and income inequality," Journal of Public Economics, Elsevier, vol. 69(1), pages 123-141, July. [Downloadable!] (restricted)
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