We examine various determinants of property and violent crimes by using police force area level (PFA) data on England and Wales over the period of 1992–2008. Our list of potential determinants includes two law enforcement variables namely crime-specific detection rate and prison
population, and various socio-economic variables such as unemployment rate, real earnings, proportion of young people and the Gini Coefficient. By adopting a fixed effect dynamic GMM estimation methodology we attempt to address the potential bias that arises from the presence of time-invariant
unobserved characteristics of a PFA and the endogeneity of several regressors. There is a significant positive effect of own-lagged crime rate. The own-lagged effect is stronger for property crime, on an average, than violent crime. We find that, on an average, higher detection rate and prison
population leads to lower property and violent crimes. This is robust to various specifications. However, socio-economic variables with the exception of real earnings play a limited role in explaining different crime types.
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Department of Health Science, University of York, YO105DD, UK 2:
Department of Economics, University of Birmingham, B152TT, UK 3:
PNC Bank- Marketing Science and Innovation, Highland Hills, OH-44122, USA