Inequality and Crime: Separating the Effects of Permanent and Transitory Income
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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 70 (2008)
Issue (Month): 2 (04)
|Contact details of provider:|| Postal: |
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0305-9049
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0305-9049|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Donohue, John J. & Levitt, Steven D., 2000.
"The Impact of Legalized Abortion on Crime,"
Berkeley Olin Program in Law & Economics, Working Paper Series
qt00p599hk, Berkeley Olin Program in Law & Economics.
- Demombynes, Gabriel & Ozler, Berk, 2002.
"Crime and local inequality in South Africa,"
Policy Research Working Paper Series
2925, The World Bank.
- Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002.
"How Much Should We Trust Differences-in-Differences Estimates?,"
NBER Working Papers
8841, National Bureau of Economic Research, Inc.
- Nilsson, Anna, 2004. "Income Inequality and Crime: The Case of Sweden," Research Papers in Economics 2004:3, Stockholm University, Department of Economics.
- Lorenzo Cappellari, 2002.
"The dynamics and inequality of Italian male earnings: permanent changes or transitory fluctuations?,"
10th International Conference on Panel Data, Berlin, July 5-6, 2002
C2-2, International Conferences on Panel Data.
- Nilsson, Anna, 2004. "Income inequality and crime: The case of Sweden," Working Paper Series 2004:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Baker, Michael, 1997. "Growth-Rate Heterogeneity and the Covariance Structure of Life-Cycle Earnings," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 338-75, April.
- Leamer, Edward E, 1983.
"Let's Take the Con Out of Econometrics,"
American Economic Review,
American Economic Association, vol. 73(1), pages 31-43, March.
- Raphael, Steven & Winter-Ember, Rudolf, 2001.
"Identifying the Effect of Unemployment on Crime,"
Journal of Law and Economics,
University of Chicago Press, vol. 44(1), pages 259-83, April.
- Raphael, Steven & Winter-Ebmer, Rudolf, 1999. "Identifying the Effect of Unemployment on Crime," CEPR Discussion Papers 2129, C.E.P.R. Discussion Papers.
- Raphael, Steven & WINTER-EBMER, RUDOLF, 1998. "Identifying the Effect of Unemployment on Crime," University of California at San Diego, Economics Working Paper Series qt5hb4h56g, Department of Economics, UC San Diego.
- Nilsson, Anna & Agell, Jonas, 2003.
"Crime, unemployment and labor market programs in turbulent times,"
Working Paper Series
2003:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Nilsson, Anna & Agell, Jonas, 2003. "Crime, Unemployment and Labor Market Programs in Turbulent Times," Research Papers in Economics 2003:13, Stockholm University, Department of Economics.
- Edin, P.-A. & Fredriksson, P., 2000.
"LINDA - Longitudinal INdividual DAta for Sweden,"
2000-19, Uppsala - Working Paper Series.
- Edin, P.-A. & Fredriksson, P., 2000. "LINDA - Longitudinal INdividual DAta for Sweden," Papers 2000:19, Uppsala - Working Paper Series.
- Edin, Per-Anders & Fredriksson, Peter, 2000. "LINDA - Longitudinal INdividual DAta for Sweden," Working Paper Series 2000:19, Uppsala University, Department of Economics.
- K. Newey, Whitney, 1985. "Generalized method of moments specification testing," Journal of Econometrics, Elsevier, vol. 29(3), pages 229-256, September.
- Abowd, John M & Card, David, 1989.
"On the Covariance Structure of Earnings and Hours Changes,"
Econometric Society, vol. 57(2), pages 411-45, March.
- John M. Abowd & David Card, 1986. "On the Covariance Structure of Earnings and Hours Changes," NBER Working Papers 1832, National Bureau of Economic Research, Inc.
- 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.
- Lorenzo Cappellari, 2004. "The Dynamics and Inequality of Italian Men’s Earnings: Long-term Changes or Transitory Fluctuations?," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
- Freeman, Richard B., 1999. "The economics of crime," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 52, pages 3529-3571 Elsevier.
- Robert A. Moffitt & Peter Gottschalk, 2002. "Trends in the Transitory Variance of Earnings in the United States," Economic Journal, Royal Economic Society, vol. 112(478), pages C68-C73, March.
- Bourguignon Francois, 2009. "Crime as a Social Cost of Poverty and Inequality: A Review Focusing on Developing countries," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE, September.
- Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
- Milton Friedman & Simon Kuznets, 1954. "Income from Independent Professional Practice," NBER Books, National Bureau of Economic Research, Inc, number frie54-1, December.
- Edmark, Karin, 2003. "The Effects of Unemployment on Property Crime: Evidence from a Period of Unusually Large Swings in the Business Cycle," Working Paper Series 2003:14, Uppsala University, Department of Economics.
- Gabor Kezdi, 2005. "Robus Standard Error Estimation in Fixed-Effects Panel Models," Econometrics 0508018, EconWPA.
When requesting a correction, please mention this item's handle: RePEc:bla:obuest:v:70:y:2008:i:2:p:129-153. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.