IDEAS home Printed from https://ideas.repec.org/a/ukm/jlekon/v53y2019i1p59-72.html
   My bibliography  Save this article

Examining the Linkages between Street Crime and Selected State Economic Variables in Malaysia: A Panel Data Analysis

Author

Listed:
  • Latimaha, Rusli

    (School of Social Sciences Universiti Sains Malaysia 11700 Minden, Penang MALAYSIA)

  • Ismail, Nor Asmat

    (School of Social Sciences Universiti Sains Malaysia 11700 Minden, Penang MALAYSIA)

Abstract

In this paper, the authors use dynamic panel data in order to assess the linkages between the cost of living, income inequality, gross domestic product (GDP) per capita, population and unemployment rate with respect to the street crime rate in Malaysia. More specifically, the investigation considers whether the following could be capable of generating any difference in the crime rate observed across many types of street crime. The F-test, Breusch-Pagan Lagrange Multiplier test and Hausman tests affirm the most preferred model to explain criminal behaviour is by using Fixed Effects Model almost for all types of street crime. The findings of the estimated coefficients reveal that the cost of living is negatively related to all street crime types and not significant as well as unemployment rate. There is a motivation towards street crime not to earn a living or jobless, but other motivating push factors that relate to the personalities of the offenders such as drug addiction. Moreover, income inequality is only significant in terms of total street crime and unarmed robbery gang estimation models as well as GDP per capita and population in snatch and theft estimation models. Interestingly, we extend the by changing the definition of crime into percentage and the results show that the cost of living is significant with the correct sign and has a positive relationship with all types of street crime rates except for snatch and theft estimation models. The GDP per capita is also a main influencer on all types of street crime rates and has a negative relationship. Finally, the unemployment rate is only significant in the unarmed robbery estimation models and has a positive relationships as well as income inequality variable in total street crime and unarmed robbery gang estimation models. This street crime has been shown to be sensitive to the change in unemployment rate and income inequality and also have positive linkages.

Suggested Citation

  • Latimaha, Rusli & Ismail, Nor Asmat, 2019. "Examining the Linkages between Street Crime and Selected State Economic Variables in Malaysia: A Panel Data Analysis," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(1), pages 59-72.
    • Handle: RePEc:ukm:jlekon:v:53:y:2019:i:1:p:59-72
    DOI: http://dx.doi.org/10.17576/JEM-2019-5301-6
    as

    Download full text from publisher

    File URL: http://www.ukm.my/jem/wp-content/uploads/2021/06/jeko_531-6.pdf
    Download Restriction: no
    File URL: https://libkey.io/http://dx.doi.org/10.17576/JEM-2019-5301-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ayse İmrohoroĝlu & Antonio Merlo & Peter Rupert, 2006. "Understanding the determinants of crime," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 30(2), pages 270-284, June.
    2. Julio H. Cole & Andrés Marroquín Gramajo, 2009. "Homicide Rates in a Cross‐Section of Countries: Evidence and Interpretations," Population and Development Review, The Population Council, Inc., vol. 35(4), pages 749-776, December.
    3. Paresh Kumar Narayan & Russell Smyth, 2004. "Crime rates, male youth unemployment and real income in Australia: evidence from Granger causality tests," Applied Economics, Taylor & Francis Journals, vol. 36(18), pages 2079-2095.
    4. Richard J. Cebula, 1980. "Geographic Mobility and the Cost of Living: An Exploratory Note," Urban Studies, Urban Studies Journal Limited, vol. 17(3), pages 353-355, October.
    5. Mathur, Vijay K, 1978. "Economics of Crime: An Investigation of the Deterrent Hypothesis for Urban Areas," The Review of Economics and Statistics, MIT Press, vol. 60(3), pages 459-466, August.
    6. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    7. Chiu, W. Henry & Madden, Paul, 1998. "Burglary and income inequality," Journal of Public Economics, Elsevier, vol. 69(1), pages 123-141, July.
    8. Choe, Jongmook, 2008. "Income inequality and crime in the United States," Economics Letters, Elsevier, vol. 101(1), pages 31-33, October.
    9. Ana María Cerro & Osvaldo Meloni, 2000. "Determinants of the crime rate in Argentina during the '90s," Estudios de Economia, University of Chile, Department of Economics, vol. 27(2 Year 20), pages 297-311, December.
    10. Triplett, Jack E, 2001. "Should the Cost-of-Living Index Provide the Conceptual Framework for a Consumer Price Index?," Economic Journal, Royal Economic Society, vol. 111(472), pages 311-334, June.
    11. Gillingham, Robert & Greenlees, John S, 1987. "The Impact of Direct Taxes on the Cost of Living," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 775-796, August.
    12. Trudi Renwick, 1998. "Basic Needs Budgets Revisited: Does the U.S. Consumer Price Index Overestimate the Changes in the Cost of Living for Low-Income Families?," Feminist Economics, Taylor & Francis Journals, vol. 4(3), pages 129-142.
    13. Abdul Hamid, Baharom & Habibullah, Muzafar & Mohd Noor, Zaleha, 2013. "Crime and Its Socio-Macroeconomics Determinants: A Panel-Error-Correction Cointegration Analysis," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 47(2), pages 13-24.
    14. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    15. 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.
    16. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muhammad Hilmi Abdul Majid & Kamarulzaman Ibrahim & Nurulkamal Masseran, 2023. "Three-Part Composite Pareto Modelling for Income Distribution in Malaysia," Mathematics, MDPI, vol. 11(13), pages 1-15, June.
    2. Latimaha, Rusli & Ismail, Nor Asmat & Bahari, Zakaria, 2020. "Cost of Living and Standard of Living Nexus: The Determinants of Cost of Living," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 54(3), pages 1-14.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chintrakarn, Pandej & Herzer, Dierk, 2012. "More inequality, more crime? A panel cointegration analysis for the United States," Economics Letters, Elsevier, vol. 116(3), pages 389-391.
    2. Latimaha, Rusli & Ismail, Nor Asmat & Bahari, Zakaria, 2020. "Cost of Living and Standard of Living Nexus: The Determinants of Cost of Living," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 54(3), pages 1-14.
    3. Baharom, A.H. & Habibullah, M.S., 2008. "Crime and Income Inequality: The Case of Malaysia," MPRA Paper 11871, University Library of Munich, Germany.
    4. Najmeh Izadi, 2012. "The Effect of Income Inequality on Property Crime: Evidence from Iran," Journal of Economics and Behavioral Studies, AMH International, vol. 4(5), pages 245-251.
    5. Meloni, Osvaldo, 2014. "Does poverty relief spending reduce crime? Evidence from Argentina," International Review of Law and Economics, Elsevier, vol. 39(C), pages 28-38.
    6. Bethencourt, Carlos, 2022. "Crime and social expenditure: A political economic approach," European Journal of Political Economy, Elsevier, vol. 75(C).
    7. Cerro, Ana María & Ortega, Ana Carolina, 2012. "Sources of Regional Crime Persistence Argentina 1980-2008," MPRA Paper 44482, University Library of Munich, Germany.
    8. Allen Head & Huw Lloyd-Ellis & Hongfei Sun, 2016. "Search, Liquidity, and the Dynamics of House Prices and Construction: Corrigendum," American Economic Review, American Economic Association, vol. 106(4), pages 1214-1219, April.
    9. Neil Metz & Mariya Burdina, 2018. "Neighbourhood income inequality and property crime," Urban Studies, Urban Studies Journal Limited, vol. 55(1), pages 133-150, January.
    10. Songman Kang, 2016. "Inequality and crime revisited: effects of local inequality and economic segregation on crime," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(2), pages 593-626, April.
    11. Corvalan, Alejandro & Pazzona, Matteo, 2022. "Inequality, crime and private protection," Economics Letters, Elsevier, vol. 210(C).
    12. Christina Christou & Juncal Cunado & Rangan Gupta, 2019. "Price Convergence Patterns across U.S. States," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 66(2), pages 187-201.
    13. Goh, Lim Thye & Law, Siong Hook, 2023. "The crime rate of five Latin American countries: Does income inequality matter?," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 745-763.
    14. Tomal Mateusz, 2019. "House Price Convergence on the Primary and Secondary Markets: Evidence from Polish Provincial Capitals," Real Estate Management and Valuation, Sciendo, vol. 27(4), pages 62-73, December.
    15. Soeren C. Schwuchow, 2023. "Organized crime as a link between inequality and corruption," European Journal of Law and Economics, Springer, vol. 55(3), pages 469-509, June.
    16. Fabio Clementi & Enzo Valentini, 2018. "Economia irregolare, criminalità e disuguaglianza dei redditi: un circolo vizioso? (Black economy, crime, and income inequality: A vicious cycle?)," Moneta e Credito, Economia civile, vol. 71(284), pages 283-296.
    17. Myachin, N., 2022. "Is there a natural rate of crime in Russia?," Journal of the New Economic Association, New Economic Association, vol. 53(1), pages 85-98.
    18. Bebonchu Atems, 2020. "Identifying the Dynamic Effects of Income Inequality on Crime," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(4), pages 751-782, August.
    19. Abdul Hamid, Baharom & Habibullah, Muzafar & Mohd Noor, Zaleha, 2013. "Crime and Its Socio-Macroeconomics Determinants: A Panel-Error-Correction Cointegration Analysis," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 47(2), pages 13-24.
    20. Songman Kang, 2016. "Inequality and crime revisited: effects of local inequality and economic segregation on crime," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(2), pages 593-626, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ukm:jlekon:v:53:y:2019:i:1:p:59-72. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Muhammad Asri Abd Ghani (email available below). General contact details of provider: https://edirc.repec.org/data/feukmmy.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.