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What Determines the Crime Rate? A Macroeconomic Case Study

Author

Listed:
  • Tomas Karpavicius

    (Faculty of Economics and Business Administration, Vilnius University, 10222 Vilnius, Lithuania)

  • Andriy Stavytskyy

    (Faculty of Economics, Taras Shevchenko National University of Kyiv, 01033 Kyiv, Ukraine)

  • Vincentas Rolandas Giedraitis

    (Faculty of Economics and Business Administration, Vilnius University, 10222 Vilnius, Lithuania)

  • Erstida Ulvidienė

    (Faculty of Economics and Business Administration, Vilnius University, 10222 Vilnius, Lithuania)

  • Ganna Kharlamova

    (Faculty of Economics, Taras Shevchenko National University of Kyiv, 01033 Kyiv, Ukraine)

  • Brigita Kavaliauskaite

    (Faculty of Philosophy, Vilnius University, 10222 Vilnius, Lithuania)

Abstract

This study examines the relationship between economic indicators and crime rates in six European countries: Lithuania, Germany, Greece, Portugal, Finland and Sweden. By examining macroeconomic factors such as GDP, security spending and per capita consumption, the study aims to understand how these variables affect crime dynamics. Using robust econometric techniques, including panel regression with fixed effects, the study identifies significant correlations and patterns. The findings reveal that the crime rate has a high degree of inertia and is significantly influenced by the previous level. Contrary to expectations, increased per capita consumption is associated with higher crime rates, which may indicate that wealthier societies are experiencing an increase in economic crime. Furthermore, higher spending on security does not necessarily reduce crime, suggesting that types of crime evolve as detection capabilities improve. This study highlights the complexity of the nexus between crime and the economy, highlighting the need for multifaceted, long-term policies to effectively combat crime and increase public safety. The results offer valuable insights for policymakers to develop comprehensive crime prevention and economic development strategies.

Suggested Citation

  • Tomas Karpavicius & Andriy Stavytskyy & Vincentas Rolandas Giedraitis & Erstida Ulvidienė & Ganna Kharlamova & Brigita Kavaliauskaite, 2024. "What Determines the Crime Rate? A Macroeconomic Case Study," Economies, MDPI, vol. 12(9), pages 1-18, September.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:9:p:250-:d:1479781
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    References listed on IDEAS

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    2. Itskovich, Eran & Factor, Roni, 2023. "Economic inequality and crime: The role of social resistance," Journal of Criminal Justice, Elsevier, vol. 86(C).
    3. Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-1294, September.
    4. Muhammad Khalid Anser & Zahid Yousaf & Abdelmohsen A. Nassani & Saad M. Alotaibi & Ahmad Kabbani & Khalid Zaman, 2020. "Dynamic linkages between poverty, inequality, crime, and social expenditures in a panel of 16 countries: two-step GMM estimates," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-25, December.
    5. G. Nagasubramaniyan & Augustine Joseph, 2024. "Urban-rural unemployment and crime in India: a panel data analysis," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 16(1), pages 1-15.
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