A Structural Model of Crime and Inequality in Colombia

Abstract

Economic theory suggests that inequality should influence crime positively. Yet, the evidence in favor of that hypothesis is weak. Pure cross‐sectional analyses show significant positive effects but cannot control for fixed effects. Time series and panel data point to a variety of results, but few turn out being significant. The hypothesis maintained in this paper is that it is a specific part of the distribution, rather than the overall distribution as summarized by conventional inequality measures, that is most likely to influence the rate of (property) crime in a given society. Using a simple theoretical model and panel data in seven Colombian cities over a fifteen‐year period, a structural model is proposed that permits identifying the precise segment of the population whose relative income best explains time changes in crime. (JEL: K42, D63, O15)

The impact of social capital on crime: Evidence from the Netherlands

“…Previous research on the effect of income inequality on crime also shows contradicting results (e.g., Soares, 2004). However, recent research shows that changes in the distribution of income inequality rather than income inequality itself affect property crime (Bourguignon, Nuñez, and Sanchez, 2003;Chiu and Madden, 1998). Another point is that the cross-section analysis we employ throughout the paper may not be such a suitable approach to assess the importance of inequality and unemployment on crime rates.…”

Strong and weak ties in employment and crime

“…For instance, the positive correlation between self-reported delinquency by adolescent and the number of delinquent friends is among the strongest and most consistent findings in the delinquency literature (Warr 1996, Matsueda and Anderson 1998). 1 There are also sizable and significant effects of unemployment (Raphael and Winter-Ebmer 2001), wages (Machin and Meghir 2004) and inequality (Bourguignon et. al.…”

“…We assume that w > b. 5 Unemployed workers decide between becoming a criminal, staying unemployed, or becoming employed. Individuals are forward-looking with respect to their future status when taking this decision, and anticipate the impact of current decisions on their future opportunities and payoffs.…”

“…Yet, they are myopic with respect to the status of their current partner, which they treat as a default state. 5 We keep the wage w fixed throughout. A partial equilibrium approach renders the analysis more tractable without affecting qualitatively the results.…”

Spillovers from conditional cash transfer programs: Bolsa Família and crime in urban Brazil

“…And third, the paper also speaks to the discussion on the socioeconomic determinants of crime. Various authors have documented a robust correlation between inequality and crime (see, for example, Fajnzylber et al, 2002, Bourguignon et al, 2003, Soares, 2004, or the discussion in Soares and Naritomi, 2010). To the extent that Bolsa Família has had a substantial impact on inequality in Brazil (Soares and Sátyro, 2009), and that the income effect is likely to be an important force behind our results, the evidence presented here may be seen as an additional piece of information on the relationship between socioeconomic conditions and crime (in line with the evidence from welfare payments discussed before).…”