Do Macroeconomic Variables Drive Crime Types? A Long-term Evidence from India

Abstract

Variables Used: Total Crime, IPC Crimes, Violent crimes, Property crime, Economic crime, Inflation, Unemployment, Per capita real GDP. Objectives: Economists have long believed that macroeconomic variables influence crime. We test this conjecture using nearly universal data on crimes in India between the years 1991 and 2018. Specifically, we investigate if crimes like Total, IPC, Violent, Property, and Economic Crimes have any long-term link with economic factors like inflation, Real Per capita GDP, and unemployment. Methods: Data related to economic variables were obtained from World Bank data source and crimes-related data were obtained from NCRB.   In order to find out long run relation, ARDL Model has been used. Results: The data tell an intriguing story. First, crime is strongly and causally related to unemployment in cross-sectional data. However, unemployment has no influence on crime in time series data. Second, income inequality increases economic crimes but reduces violent crimes. Third, inflation increases property crimes but has no impact on other kinds of crimes. Fourth, economic growth increases economic crimes but does not have impact on other kinds of crimes. Conclusion: Overall, macroeconomic variables like unemployment, inflation, and economic growth influence particularly kinds of crimes. Put differently, macroeconomic conditions appear to determine allocation of criminal activity among different kinds of crimes rather change the total quantity of criminal activity in society.