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The Non-Linear Effect of Wealth on Crime

Author

Listed:
  • 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.

Suggested Citation

  • Chihiro Muroi & Robert Baumann, 2009. "The Non-Linear Effect of Wealth on Crime," Working Papers 0907, College of the Holy Cross, Department of Economics.
  • Handle: RePEc:hcx:wpaper:0907
    as

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    File URL: http://web.holycross.edu/RePEc/hcx/HC0907-Muroi-Baumann_Crime.pdf
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    References listed on IDEAS

    as
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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.

    More about this item

    Keywords

    crime; wealth; Uniform Crime Reports;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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