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Does the economy have an impact on crime
Introduce
This paper will research the economic projects, which examine
the effect of median income in crime. Therefore, this paper will
look into the literature review, the model part and the empirical
results. Another part of the report shall analysis the data to be
used in the sample study Finally, the paper will consider the
empirical results, which include, regression results for at least
one given model. Consequently, the paper will provide
interpretation and discussion of the results obtained from the
regression models.
The project assumes that the economy can affect the crime rate.
In other words, the paper will test to see if the economic
situation can affect the crime rate for citizens. Therefore, there
are several variables that will be evaluated in the model to
determine the position of the above hypothesis. The variables
include, economic (median income), unemployment rate, race,
and age. The types of crimes that are violent crimes and
property crimes.
Literature Review
there is the evaluation of the past studies that have been done
and they are apparently similar or related to the current study.
According to Goulas and Zervoyianni, (Zervoyianni, 2013) they
argue that where is increased crime rates there’s an
asymmetrical impact on the development in the economy. As
seen, the report looks at the other angle of crime affecting
economics and hence provides insights on the counterargument
that can be developed in the research.
The other paper that we can refer to the argument by Randi
and Lance (Lochner, 2012), that propose that the education
levels are far more impactful on the crime than ever considered.
They argue that the initial policies to eradicate crime focus on
the punishment and retribution instead of embarking on
education policies that can be more efficient in the
determination of lower crime levels. They conclude that there is
very close correlation of the crime and the education levels of a
particular set of population statistics.
The other research paper that is relevant in the study is the
discussion by Benjamin, Manish and Nair (Benjamin Powell,
2010). This is a similar paper to the analysis we had in the first
paper. The counterargument that the crime is the variable that
relates to the economy. They are of opinion that certain crimes
such as corruption can both increase or decrease economic
growth. However, the comparison between the different nations
was difficult, owing to the fact that it is difficult to ascertain
what is crime in one nation and what is crime in another nation.
This was the biggest challenge in the research.
The Regression Model.
The use of the model is to enable, generalization of the crime
in terms of the variables that are considered to affect it. It
allows the calculation of any given crime rate provided the
coefficients affecting the impact of the variables in the given
model. The model is described below:
1.
2.
Variable table
Dependent Variable:
Crime:
Key Independent Variables:
Economic( impact) MINC= median income ;
U= Unemployment rate
Other Control Variables;
RL= real GDP
R= race: black, Asian, white
A= Age %age
%age
%age
the table from below use fixed effect model ,T-test, and F-test
to analysis these data:
Dependent Variable: PCRIMES
Method: Panel Least Squares
Date: 12/07/17 Time: 15:59
Sample: 2009 2015
Periods included: 7
Cross-sections included: 50
Total panel (balanced) observations: 350
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
3998.143
184.797
21.63533
0
MEDIANINCOME
-0.023588
0.003453
-6.830613
0
URATE
-75.83534
66.32572
-1.143378
0.2537
R-squared
0.122159
Mean dependent var
2744.686
Adjusted R-squared
0.117099
S.D. dependent var
597.4182
S.E. of regression
561.3509
Akaike info criterion
15.5071
Sum squared resid
1.09E+08
Schwarz criterion
15.54017
Log likelihood
-2710.743
Hannan-Quinn criter.
15.52027
F-statistic
24.14392
Durbin-Watson stat
0.079939
Prob(F-statistic)
0
Dependent Variable: PCRIMES
Method: Panel Least Squares
Date: 12/07/17 Time: 09:54
Sample: 2009 2015
Periods included: 7
Cross-sections included: 50
Total panel (balanced) observations: 350
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
6937.141
440.5466
15.74667
0
MEDIANINCOME
-0.030732
0.003424
-8.975441
0
URATE
-85.90274
57.32053
-1.498638
0.1349
PCTASIAN
-852.1822
491.3764
-1.734276
0.0838
PCTBLACK
-763.3719
421.8195
-1.809712
0.0712
PCTWHITE
-3060.234
424.8912
-7.202394
0
R-squared
0.351609
Mean dependent var
2744.686
Adjusted R-squared
0.342185
S.D. dependent var
597.4182
S.E. of regression
484.5409
Akaike info criterion
15.22127
Sum squared resid
80764273
Schwarz criterion
15.28741
Log likelihood
-2657.723
Hannan-Quinn criter.
15.2476
F-statistic
37.30881
Durbin-Watson stat
0.122588
Prob(F-statistic)
0
Dependent Variable: PCRIMES
Method: Panel Least Squares
Date: 12/07/17 Time: 16:04
Sample: 2009 2015
Periods included: 7
Cross-sections included: 50
Total panel (balanced) observations: 350
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
3908.495
883.4404
4.424175
0
MEDIANINCOME
-0.020649
0.005334
-3.871289
0.0001
URATE
-92.39022
52.65586
-1.754605
0.0802
REALGDP
-0.016513
0.004613
-3.58006
0.0004
PCTWHITE
-2377.273
417.3629
-5.695936
0
PCTBLACK
-827.7186
403.0144
-2.053819
0.0408
PCTASIAN
-1198.019
499.8169
-2.396916
0.0171
AGE4549
-59.39759
5590.068
-0.010626
0.9915
AGE4044
11598.41
6401.069
1.81195
0.0709
AGE3539
17178.51
6338.114
2.71035
0.0071
AGE3034
-12249.36
6016.789
-2.035864
0.0425
AGE2529
39343.19
6015.756
6.540025
0
AGE2024
1925.904
5585.258
0.344819
0.7304
AGE1519
-16464.81
6757.85
-2.436398
0.0154
R-squared
0.478598
Mean dependent var
2744.686
Adjusted R-squared
0.458425
S.D. dependent var
597.4182
S.E. of regression
439.6506
Akaike info criterion
15.04902
Sum squared resid
64946340
Schwarz criterion
15.20333
Log likelihood
-2619.578
Hannan-Quinn criter.
15.11044
F-statistic
23.72437
Durbin-Watson stat
0.252747
Prob(F-statistic)
0
Dependent Variable: VCRIMES
Method: Panel Least Squares
Date: 12/07/17 Time: 16:06
Sample: 2009 2015
Periods included: 7
Cross-sections included: 50
Total panel (balanced) observations: 350
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
505.4943
41.99932
12.03577
0
MEDIANINCOME
-0.002844
0.000785
-3.623373
0.0003
R-squared
0.036355
Mean dependent var
355.3351
Adjusted R-squared
0.033586
S.D. dependent var
129.7991
S.E. of regression
127.6008
Akaike info criterion
12.54139
Sum squared resid
5666124
Schwarz criterion
12.56343
Log likelihood
-2192.743
Hannan-Quinn criter.
12.55016
F-statistic
13.12883
Durbin-Watson stat
0.046511
Prob(F-statistic)
0.000334
Dependent Variable: VCRIMES
Method: Panel Least Squares
Date: 12/07/17 Time: 16:07
Sample: 2009 2015
Periods included: 7
Cross-sections included: 50
Total panel (balanced) observations: 350
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
505.8775
42.05145
12.02996
0
MEDIANINCOME
-0.002836
0.000786
-3.608988
0.0004
URATE
-7.577961
15.09274
-0.502093
0.6159
R-squared
0.037055
Mean dependent var
355.3351
Adjusted R-squared
0.031504
S.D. dependent var
129.7991
S.E. of regression
127.7381
Akaike info criterion
12.54638
Sum squared resid
5662011
Schwarz criterion
12.57944
Log likelihood
-2192.616
Hannan-Quinn criter.
12.55954
F-statistic
6.676356
Durbin-Watson stat
0.048
Prob(F-statistic)
0.001429
Dependent Variable: VCRIMES
Method: Panel Least Squares
Date: 12/07/17 Time: 16:09
Sample: 2009 2015
Periods included: 7
Cross-sections included: 50
Total panel (balanced) observations: 350
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
987.3317
97.82204
10.09314
0
MEDIANINCOME
-0.004095
0.00115
-3.562279
0.0004
URATE
-11.01661
12.60487
-0.873997
0.3827
REALGDP
0.001648
0.00102
1.615129
0.1072
PCTWHITE
-611.917
94.18756
-6.496792
0
PCTBLACK
88.99652
93.38981
0.952958
0.3413
PCTASIAN
-385.9051
111.0086
-3.476354
0.0006
R-squared
0.339154
Mean dependent var
355.3351
Adjusted R-squared
0.327594
S.D. dependent var
129.7991
S.E. of regression
106.4357
Akaike info criterion
12.19276
Sum squared resid
3885699
Schwarz criterion
12.26992
Log likelihood
-2126.733
Hannan-Quinn criter.
12.22347
F-statistic
29.33863
Durbin-Watson stat
0.087416
Prob(F-statistic)
0
Dependent Variable: VCRIMES
Method: Panel Least Squares
Date: 12/07/17 Time: 16:08
Sample: 2009 2015
Periods included: 7
Cross-sections included: 50
Total panel (balanced) observations: 350
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
338.7859
187.6215
1.805689
0.0719
MEDIANINCOME
-0.003808
0.00085
-4.481187
0
URATE
-5.900753
14.07034
-0.419375
0.6752
AGE4549
-2341.323
1479.477
-1.582534
0.1145
AGE4044
3988.203
1648.414
2.419418
0.0161
AGE3539
3755.535
1674.546
2.242719
0.0256
AGE3034
-4205.107
1613.9
-2.605555
0.0096
AGE2529
8462.972
1523.81
5.553825
0
AGE2024
-1523.518
1428.622
-1.066425
0.287
AGE1519
-4540.6
1673.039
-2.713983
0.007
R-squared
0.19166
Mean dependent var
355.3351
Adjusted R-squared
0.170262
S.D. dependent var
129.7991
S.E. of regression
118.234
Akaike info criterion
12.41136
Sum squared resid
4752951
Schwarz criterion
12.52159
Log likelihood
-2161.989
Hannan-Quinn criter.
12.45524
F-statistic
8.957205
Durbin-Watson stat
0.128865
Prob(F-statistic)
0
References
Benjamin Powell, G. M. (2010). Corruption, Crime and
Economic Growth . Benson Print.
Lochner, R. H. (2012). The Impact of Education on Crime:
International Evidence . Dice Report.
Zervoyianni, E. G. (2013). Economic growth and crime: does
uncertainty matter? Retrieved from Econ Papers:
http://econpapers.repec.org/article/tafapeclt/v_3a20_3ay_3a201
3_3ai_3a5_3ap_3a420-427.htm
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