What Determines the Crime Rate? A Macroeconomic Case Study

Tomas Karpavicius, Andriy Stavytskyy, Vincentas Rolandas Giedraitis, Erstida Ulvidienė, Ganna Kharlamova () and Brigita Kavaliauskaite
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Tomas Karpavicius: Faculty of Economics and Business Administration, Vilnius University, 10222 Vilnius, Lithuania
Andriy Stavytskyy: Faculty of Economics, Taras Shevchenko National University of Kyiv, 01033 Kyiv, Ukraine
Vincentas Rolandas Giedraitis: Faculty of Economics and Business Administration, Vilnius University, 10222 Vilnius, Lithuania
Erstida Ulvidienė: Faculty of Economics and Business Administration, Vilnius University, 10222 Vilnius, Lithuania
Ganna Kharlamova: Faculty of Economics, Taras Shevchenko National University of Kyiv, 01033 Kyiv, Ukraine
Brigita Kavaliauskaite: Faculty of Philosophy, Vilnius University, 10222 Vilnius, Lithuania

Economies, 2024, vol. 12, issue 9, 1-18

Abstract: This study examines the relationship between economic indicators and crime rates in six European countries: Lithuania, Germany, Greece, Portugal, Finland and Sweden. By examining macroeconomic factors such as GDP, security spending and per capita consumption, the study aims to understand how these variables affect crime dynamics. Using robust econometric techniques, including panel regression with fixed effects, the study identifies significant correlations and patterns. The findings reveal that the crime rate has a high degree of inertia and is significantly influenced by the previous level. Contrary to expectations, increased per capita consumption is associated with higher crime rates, which may indicate that wealthier societies are experiencing an increase in economic crime. Furthermore, higher spending on security does not necessarily reduce crime, suggesting that types of crime evolve as detection capabilities improve. This study highlights the complexity of the nexus between crime and the economy, highlighting the need for multifaceted, long-term policies to effectively combat crime and increase public safety. The results offer valuable insights for policymakers to develop comprehensive crime prevention and economic development strategies.

Keywords: Lithuania; Germany; Greece; Portugal; Finland; Sweden; regression; crime index; per capita consumption; GDP share of security spending (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2024
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