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Modelling the effect of crime on economic activity: The case of Mexican states

Antonio Alvarez, Rafael Garduño Rivera and Hector Nuñez ()

No 2016/01, Efficiency Series Papers from University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG)

Abstract: We estimate the technical efficiency of Mexican states using stochastic production frontier models. In particular, we study the effect of crime on efficiency. The empirical section uses panel data over the period 1988-2008. A distinctive feature of the paper is the use of socioeconomic and location data in order to control for the heterogeneity of the states. The main contribution of this paper is to test for the existence of a threshold effect of crime. We find that crime rate negatively affects the efficiency of the states and that its effect is only significant after a certain level.

Keywords: Regional efficiency; stochastic frontier; Mexico; panel data; crime (search for similar items in EconPapers)
JEL-codes: D24 O18 R11 (search for similar items in EconPapers)
Pages: 26
Date: 2016
New Economics Papers: this item is included in nep-eff, nep-sog and nep-ure
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