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Crime and Economic Growth: Evidence from India

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  • Kumar, Surender

Abstract

This paper empirically examines the causality between crime rates and economic growth using state level data in India. A reduced form equation has been estimated using instrumental variable approach to correct for joint endogeneity between crime and economic growth. Higher crimes may reduce level of per capita income and its growth rate. Controlling intentional homicide and robbery rates in each of the states to the minimum level they observed during 1991-2011 period, the predicted annual growth in per capita income could have been higher by 1.57 and 1.2 percentage points, respectively. The average annual gain in growth rate by bringing down the homicide rate at a level of national minimum could be 0.62 percentage points. Note that the loss in growth rate is lower or negative in the states that have higher per capita income.

Suggested Citation

  • Kumar, Surender, 2013. "Crime and Economic Growth: Evidence from India," MPRA Paper 48794, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:48794
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    File URL: https://mpra.ub.uni-muenchen.de/48794/1/MPRA_paper_48794.pdf
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    References listed on IDEAS

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    1. repec:bla:presci:v:96:y:2017:i:3:p:477-494 is not listed on IDEAS
    2. repec:ere:journl:v:xxxvi:y:2017:i:1:p:25-58 is not listed on IDEAS

    More about this item

    Keywords

    Crime; economic growth; panel data; India.;

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H4 - Public Economics - - Publicly Provided Goods
    • K1 - Law and Economics - - Basic Areas of Law
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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