Crime and the Economy in Mexican States: Heterogeneous Panel Estimates (1993-2012)

Concha Verdugo Yepes, Peter Pedroni and Xingwei Hu

No 2015/121, IMF Working Papers from International Monetary Fund

Abstract: This paper studies the transmission of crime shocks to the economy in a sample of 32 Mexican states over the period from 1993 to 2012. The paper uses a panel structural VAR approach which accounts for the heterogeneity of the dynamic state level responses in GDP, FDI and international migration flows, and measures the transmission via the impulse response of homicide rates. The approach also allows the study of the pattern of economic responses among states. In particular, the percentage of GDP devoted to new construction and the perception of public security are characteristics that are shown to be associated with the sign and magnitude of the responses of economic variables to crime shocks.

Keywords: WP; crime shock; homicide rate; impulse response; economic activity shock; state level; Crime; Panel Structural VAR; Mexico; crime variable; crime incidence data; migration shock; Foreign direct investment; Migration; Structural vector autoregression; Vector autoregression; Western Europe; Caribbean; Global (search for similar items in EconPapers)
Pages: 59
Date: 2015-06-04
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Citations: View citations in EconPapers (9)

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Working Paper: Crime and the Economy in Mexican States: Heterogeneous Panel Estimates (1993-2012) (2015)
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