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

Verdugo-Yepes, Concepción, Peter Pedroni and Xingwei Hu ()

MPRA Paper from University Library of Munich, Germany

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: Crime; GDP; FDI; Panel Structural VAR (search for similar items in EconPapers)
JEL-codes: C5 K42 O4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law
Date: 2015-06
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Working Paper: Crime and the Economy in Mexican States; Heterogeneous Panel Estimates (1993-2012) (2015) Downloads
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