Poverty and Crime: Evidence from Rainfall and Trade Shocks in India

Lakshmi Iyer and Petia Topalova

No 14-067, Harvard Business School Working Papers from Harvard Business School

Abstract: Does poverty lead to crime? We shed light on this question using two independent and exogenous shocks to household income in rural India: the dramatic reduction in import tariffs in the early 1990s and rainfall variations. We find that trade shocks, previously shown to raise relative poverty, also increased the incidence of violent crimes and property crimes. The relationship between trade shocks and crime is similar to the observed relationship between rainfall shocks and crime. Our results thus identify a causal effect of poverty on crime. They also lend credence to a large literature on the effects of weather shocks on crime and conflict, which has usually assumed that the income channel is the most relevant one.

Keywords: Rainfall; Weather; Crime; Trade Liberalization; India (search for similar items in EconPapers)
JEL-codes: D74 F63 I38 Q34 Q56 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2014-04, Revised 2014-08
New Economics Papers: this item is included in nep-dem, nep-dev and nep-ger
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (62)

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Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:14-067

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