Crime and Economic Growth: Evidence from India

Surender Kumar

MPRA Paper from University Library of Munich, Germany

Abstract: This paper empirically examines the causality between crime rates and economic growth using state level data in India. A reduced form equation has been estimated using instrumental variable approach to correct for joint endogeneity between crime and economic growth. Higher crimes may reduce level of per capita income and its growth rate. Controlling intentional homicide and robbery rates in each of the states to the minimum level they observed during 1991-2011 period, the predicted annual growth in per capita income could have been higher by 1.57 and 1.2 percentage points, respectively. The average annual gain in growth rate by bringing down the homicide rate at a level of national minimum could be 0.62 percentage points. Note that the loss in growth rate is lower or negative in the states that have higher per capita income.

Keywords: Crime; economic growth; panel data; India. (search for similar items in EconPapers)
JEL-codes: H10 H4 K1 K14 O4 O43 O5 O53 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-dev, nep-fdg and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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