The empirical literature addressing the relationship between crime and various measures of economic deprivation Essay

The empirical literature addressing the relationship between crime and various measures of economic deprivation such as low income and poverty is very wide. With this brief literature review I will highlight various major issues in the research paper without being exhaustive. Land et al. (1990), and Patterson (1991) provides more systematic reviews of the literature. Most of the papers discussed below focus primarily on the relationship between social level of income and crime rate in the United States in order to know whether the low or high income earner are responsible for an increase in crime rate in the United States.
Broadly speaking, the empirical research that exists on this topic has generally adopted one of three estimation strategies. The most common method has been cross sectional analyses of American cities, metropolitan areas, and states. This example of methods are Land et. al.(1990), Simpson(1985) and Williams(1984). Results vary widely across these research. In some ways, higher low income or increase poverty rates are associated with higher crime rates. A number of other papers find statistically insignificant coefficient of either low income or poverty (Bailey 1984 Williams 1984).
Title Effect of low income on crime rate in United State 3
There are numerous drawbacks to this kind of research. The first drawback is that they rely only on official crime rate any difference in police recording procedures makes cross-jurisdiction comparisons troublesome (O'Brien 1985). The second drawback in this kind of research is the difficulty of adequately controlling for unobserved characteristics of jurisdiction that are correlated both with income variables and with crime rates. In particular, both can still be at least addressed using panel data, however this strategy has been relatively not always available (1996). These demographic variables tends to change slowly over time, so there is typically relatively little inside jurisdiction variation available to deal with.
There are two other concerns that are not alleviated through the use of panel data. One of which is a high degree of correlation between the independent variables.
Another concern, as it relates to the particular question that I address in this paper, is that using data at the city, metropolitan statistical area, or state level one can't directly determine who is victimized. If one goal of the analysis is to identity victimization rates of rich versus poor, these types of analyses provide only a small amount of guidance. Cross-sectional using geographic areas such as neighborhoods and communities turn this last hold back to a substantial degree.
A second method relies on cross-country crime comparisons. Using officially reported data set of crime, Fajnzylber et al. (1998) find a strong positive relationship between crime and GDP per capita and low income. Notably, however, the coefficient on income inequality or poverty is not largely affected when officially reported data are replaced by victimization survey data.
The last method of approach that's is mostly used is of national-level series variation. This research finds that higher poverty and greater income inequality are both associated with decreased crime. .