Inequality and Property Crime: Does Absolute Inequality Matter?

What is it about?

Economic crime models and the social strain theory argue that income inequality can foster property crime, yet empirical studies do not provide strong support for this relationship across countries. An important limitation of these studies is that they only consider relative inequality measures and omit absolute ones. Absolute inequality can have a crime-inducing effect for two main reasons: First, the potential monetary returns from crime can be expected to depend on the interaction between relative income inequality and mean income. Second, higher levels of absolute inequality imply that the economic elite can capture institutions in ways that can make them dysfunctional for society as a whole. This article finds that, in contrast to relative inequality, absolute inequality is a robust and statistically significant determinant of violent property crime rates for a sample of up to 59 developed and developing countries

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Why is it important?

Our key finding indicates that theomission of absolute inequality measures in empirical studies on the correlates of crime is a major shortcoming, which can lead to incorrect conclusions about the impact of inequality on crime.