Local inequality and crime: New evidence from South Africa

The relationship between inequality and crime has been of long-standing interest to social scientists of various disciplines. While theorical work from both economics and sociology postulates a positive link between the two, the empirical evidence is rather inconclusive and typically focuses on higher-income countries. In this study, I investigate the relationship between socio-economic inequalities of various dimensions and both violent and property crime at the local level in South Africa. For this, I created a novel panel dataset of police precincts that combines official crime records from the South African Police Service with socio-economic data from two population censuses and household surveys. For identification, I exploit the variation of inequality and crime across time and space, while controlling for socio-economic and demographic characteristics of police precincts, provincespecific time trends, police cluster-fixed effects, and the spatial correlation of crime. I find strong and robust evidence for a significant, positive and linear relationship between income inequality within police precincts and local rates of violent crime and an inverted u-shaped relationship with property crime. Education inequality is more strongly related to violent crime, while housing inequality is only associated with property crime. In turn, cultural heterogeneity is positively correlated with all analyzed crimes. I also find suggestive evidence that inter-racial inequality contributes more to property crime, while intra-racial inequality contributes more to violent crime. Lastly, the results indicate that precincts which are relatively rich as compared to their neighbors suffer from higher rates of vehicle theft and aggravated robbery.