Impact of Economic Condition on Crime rate in Nigeria

That economic condition influences crime rate is a fundamental argument in economic theory. Specifically, a rational human being is expected to commit more crimes if and only if the expected gain outweigh the punishment. An individual potential offender may choose to commit a crime if the expected utility outweighs the benefits from legal engagements and risk perceptions. Furthermore, a decline or increase in macroeconomic indicators including unemployment, inflation is associated with social wellbeing. The conventional knowledge is that when economic conditions are unbearable, crime may increase. Contrarily, in the period of healthy economic condition, crime rates may decrease. This augment has motivated scholars to examine empirically the economic condition effect on crime rate in developed countries while little or nothing is known in developing countries, most importantly Nigeria. Based on this gap, this study examines the impact of economic condition on crime rate in Nigeria. To analyze this, it employs ARDL bound test approach to cointegration and causality test within the framework of VECM to examine directional relationship between crime rate and economic conditions for the period of 1985-2015.Our main finding confirms the existence of long run relationship among the variables. In addition, economic condition contributes positively and significantly to crime rate in Nigeria in short run and long run. A 1% increases in economic condition increases crime by 0.12%. The study reveals that in the long run; economic condition granger causes crime rate while crime does not granger cause economic condition. In conclusion, the study shows that real income per head could serve as a key weapon in fighting criminal activities in Nigerian economy. Furthermore, government should not only aim of economic growth, but also provide more employment opportunities, increase wage rate, and provide more basic necessities to every citizen. Enforcement of crime laws is very important to reduce the level of criminal activities in Nigeria. The Nigerian government should ensure that security matter is taken seriously. High attention should be given to security agencies especially the police and other law enforcement agencies. Their incentives and allowances need to be reviewed so that they would do their jobs diligently.