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Measurement Error and the Effect of Inequality on Experienced versus Reported Crime

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Abstract

This paper analyzes measurement errors in crime data to see how they impact econometric estimates, particularly of the key relationship between inequality and crime. Criminal victimization surveys of 140,000 respondents in 37 industrial, transition and developing countries are used. Comparing the crimes experienced by these respondents with those reported to the police, non-random and mean-reverting measurement errors are apparent. Some time-varying factors may also affect the propensity of victims to report crimes to the police, undermining the use of country-specific fixed effects as a means of dealing with measurement errors in official crime data. These measurement errors substantially attenuate both cross-sectional and panel estimates of the effect of inequality on crime.

Suggested Citation

  • John Gibson & Bonggeun Kim, 2006. "Measurement Error and the Effect of Inequality on Experienced versus Reported Crime," Working Papers in Economics 06/05, University of Waikato.
  • Handle: RePEc:wai:econwp:06/05
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    File URL: ftp://wms-webprod1.mngt.waikato.ac.nz/RePEc/wai/econwp/0605.pdf
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    1. Alberto Alesina & Eliana La Ferrara, 2000. "Participation in Heterogeneous Communities," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 847-904.
    2. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, World Bank Group, vol. 10(3), pages 565-591, September.
    3. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "What causes violent crime?," European Economic Review, Elsevier, vol. 46(7), pages 1323-1357, July.
    4. Ziggy MacDonald, 2000. "The impact of under-reporting on the relationship between unemployment and property crime," Applied Economics Letters, Taylor & Francis Journals, vol. 7(10), pages 659-663.
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    6. Thorbecke, Erik & Charumilind, Chutatong, 2002. "Economic Inequality and Its Socioeconomic Impact," World Development, Elsevier, vol. 30(9), pages 1477-1495, September.
    7. Demombynes, Gabriel & Ozler, Berk, 2005. "Crime and local inequality in South Africa," Journal of Development Economics, Elsevier, vol. 76(2), pages 265-292, April.
    8. 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.
    9. Ziggy MacDonald, 2002. "Official Crime Statistics: Their Use and Interpretation," Economic Journal, Royal Economic Society, vol. 112(477), pages 85-106, February.
    10. Soares, Rodrigo R, 2004. "Crime Reporting as a Measure of Institutional Development," Economic Development and Cultural Change, University of Chicago Press, vol. 52(4), pages 851-871, July.
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    Cited by:

    1. Lisa Cameron & Manisha Shah, 2014. "Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia," Economic Development and Cultural Change, University of Chicago Press, vol. 62(2), pages 381-415.

    More about this item

    Keywords

    crime; inequality; measurement error;

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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