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An exploration of dynamic relationship between tourist arrivals, inflation, unemployment and crime rates in Malaysia

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  • Chor Foon Tang

Abstract

Purpose - The main purpose of this study is to examine the dynamic relationship between tourist arrivals, inflation, unemployment and crime rates in Malaysia. This study covered the annual data from 1970 to 2008. Design/methodology/approach - The multivariate Johansen-Juselius cointegration test is employed to examine the potential long-run equilibrium relationship. While the Granger causality test within the vector error-correction modelling (VECM) framework is applied to determine the causal relationship between crime rate and its determinants. Findings - The Johansen-Juselius cointegration test result reveals that the variables are cointegrated and the dynamic ordinary least squares estimator suggest that unemployment, inflation and tourist arrivals are positively related to crime rates in Malaysia. For Granger causality, in the long-run tourist arrivals, inflation and unemployment rates Granger cause crime rate in Malaysia. However, in the short run we find bilateral causality between unemployment, crime and tourist arrivals. Finally, the variance decompositions and impulse response functions analyses implied that unemployment, inflation and tourist arrivals are important in explaining the variation in crime for Malaysia. Originality/value - The estimated crime rate function for Malaysia demonstrated that promoting supply-side economy and also increases the numbers of police and patrolling duties in the potential crime areas will reduce the crime rate in Malaysia and in the same time attract more tourist arrivals to Malaysia.

Suggested Citation

  • Chor Foon Tang, 2011. "An exploration of dynamic relationship between tourist arrivals, inflation, unemployment and crime rates in Malaysia," International Journal of Social Economics, Emerald Group Publishing, vol. 38(1), pages 50-69, January.
  • Handle: RePEc:eme:ijsepp:v:38:y:2011:i:1:p:50-69
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    1. repec:spr:soinre:v:133:y:2017:i:1:d:10.1007_s11205-016-1348-8 is not listed on IDEAS
    2. Lau, Evan & Hamzah, Siti Nur Zahara, 2012. "Crimonometric Analysis: Testing the Deterrence Hypothesis in Sabah," MPRA Paper 39297, University Library of Munich, Germany.
    3. Tang, Chor Foon, 2011. "Temporal Granger causality and the dynamics examination on the tourism-growth nexus in Malaysia," MPRA Paper 29237, University Library of Munich, Germany.
    4. repec:kap:ejlwec:v:45:y:2018:i:1:d:10.1007_s10657-016-9526-3 is not listed on IDEAS
    5. Tang, Chor Foon & Tan, Bee Wah & Ozturk, Ilhan, 2016. "Energy consumption and economic growth in Vietnam," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1506-1514.
    6. Tang, Chor Foon & Tan, Bee Wah, 2015. "The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam," Energy, Elsevier, vol. 79(C), pages 447-454.

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    Keywords

    Crimes; Inflation; Unemployment; Tourism; Malaysia;

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