The economic costs of insecurity on businesses in Mexico: A general equilibrium perspective

Joana Cecilia Chapa (), Edgardo Arturo Ayala and Sandra Edith Medellin
Additional contact information
Joana Cecilia Chapa: Universidad Autonoma de Nuevo Leon
Edgardo Arturo Ayala: Tecnologico de Monterrey
Sandra Edith Medellin: Tecnologico de Monterrey

EconoQuantum, Revista de Economia y Finanzas, 2023, vol. 20, issue 1, 83-99

Abstract: To assess the economic losses for households and firms produced by crime to business in Mexico. A general equilibrium model of Mexico is built. The costs of business insecurity are introduced as a combination of sales and capital taxes. The rates were calibrated with the Enterprise Survey of the World Bank. The loss for insecurity on business in Mexico is in the order of 4 to 5 percent of the GDP. The modeling does not consider the dynamics of the process nor the cost of insecurity in the primary sector. It is found that if firms can shift the crime tax forward, the household losses become equivalent to a proportional tax. To the extent that firms shift the tax backwards, especially to capital, crime functions as a progressive tax. Business insecurity has significant consequences on the Mexican economy.

Keywords: Crime; Insecurity costs; General equilibrium models; Mexico. (search for similar items in EconPapers)
JEL-codes: C68 D58 D74 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://econoquantum.cucea.udg.mx/index.php/EQ/article/view/7300/6788 (application/pdf)
https://econoquantum.cucea.udg.mx/index.php/EQ/issue/view/703

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qua:journl:v:20:y:2023:i:1:p:83-99

Access Statistics for this article

EconoQuantum, Revista de Economia y Finanzas is currently edited by Isai Guizar Mateos

More articles in EconoQuantum, Revista de Economia y Finanzas from Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia. Contact information at EDIRC.
Bibliographic data for series maintained by Sandra Ivett Portugal Padilla ().