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Crime and the Economy in Mexican States: Heterogeneous Panel Estimates (1993-2012)

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  • Ms. Concha Verdugo Yepes
  • Mr. Peter L. Pedroni
  • Xingwei Hu

Abstract

This paper studies the transmission of crime shocks to the economy in a sample of 32 Mexican states over the period from 1993 to 2012. The paper uses a panel structural VAR approach which accounts for the heterogeneity of the dynamic state level responses in GDP, FDI and international migration flows, and measures the transmission via the impulse response of homicide rates. The approach also allows the study of the pattern of economic responses among states. In particular, the percentage of GDP devoted to new construction and the perception of public security are characteristics that are shown to be associated with the sign and magnitude of the responses of economic variables to crime shocks.

Suggested Citation

  • Ms. Concha Verdugo Yepes & Mr. Peter L. Pedroni & Xingwei Hu, 2015. "Crime and the Economy in Mexican States: Heterogeneous Panel Estimates (1993-2012)," IMF Working Papers 2015/121, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2015/121
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    Cited by:

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    2. Dakpoulé Da & Mahamadou Diarra, 2023. "Effect of International Commodity Price Shocks on Public Finances in Africa," Public Finance Review, , vol. 51(2), pages 236-261, March.
    3. Fuad Mammadov & Shaig Adigozalov, 2017. "Are fiscal rules helpful in mitigating the impact of oil market fluctuations?," Working Papers 1703, Central Bank of Azerbaijan Republic.
    4. Carlos A. Carrasco & Mario Durán-Bustamante, 2018. "War on drugs, violence, and the share of low-income workers in Mexico," Economics Bulletin, AccessEcon, vol. 38(2), pages 696-702.
    5. Cortez, Willy W. & Islas-Camargo, Alejandro, 2017. "Delincuencia, Pobreza y Crecimiento Económico en México, ¿existe una relación asimétrica? [Delinquency, Poverty and Economic Growth in Mexico, is there an asymmetric relationship?]," MPRA Paper 80258, University Library of Munich, Germany, revised May 2017.
    6. Betül Mutlugün, 2022. "Endogenous income distribution and aggregate demand: Empirical evidence from heterogeneous panel structural vector autoregression," Metroeconomica, Wiley Blackwell, vol. 73(2), pages 583-637, May.
    7. Godwin Okafor & Obiajulu Ede, 2023. "Kidnapping rate and capital flight: Empirical evidence from developing countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2590-2606, July.
    8. Gregory Brock, 2020. "The real Oaxaca decomposition: convergence within Mexico’s Oaxaca region in the twenty-first century—Do types of crime and religious belief matter?," Economic Change and Restructuring, Springer, vol. 53(4), pages 543-569, November.
    9. Niramaya Laksmitaningtyas & Wisnu Setiadi Nugroho, 2023. "Analyzing the Effects of Openness and Political Variables on FDI in Indonesia," Gadjah Mada Economics Working Paper Series 202303003, Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada.

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    More about this item

    Keywords

    WP; crime shock; homicide rate; impulse response; economic activity shock; state level; Crime; Panel Structural VAR; Mexico; crime variable; crime incidence data; migration shock; Foreign direct investment; Migration; Structural vector autoregression; Vector autoregression; Western Europe; Caribbean; Global;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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