Determinants of Crime Rates in Latin America and the World
Authors: Fajnzylber, Pablo; Lederman, Daniel; Loayza, Norman
Publication date: October 1998
This study uses a new data set of crime rates for a large sample of countries for the period 1970-1994, based on information from the United Nations World Crime Surveys, to analyze the determinants of national homicide and robbery rates. A simple model of the incentives to commit crime is proposed, which explicitly considers possible causes of the persistence of crime over time (criminal inertia). Several econometric models are estimated, attempting to capture the determinants of crime rates across countries and over time. The empirical models are first run for cross-sections and then applied to panel data. The former focus on explanatory variables that do not change markedly over time, while the panel data techniques consider both the effect of the business cycle (i.e., GDP growth rate) on the crime rate and criminal inertia (accounted for by the inclusion of the lagged crime rate as an explanatory variable). The panel data techniques also consider country-specific effects, the joint endogeneity of some of the explanatory variables, and the existence of some types of measurement errors afflicting the crime data. The results show that increases in income inequality raise crime rates, deterrence effects are significant, crime tends to be counter-cyclical, and criminal inertia is significant even after controlling for other potential determinants of homicide and robbery rates.