Economic Factors Affecting Crime in Iran: Application of Panel Smooth Transition

Abstract

To reduce crime, it is necessary to study the reasons of criminal behavior. A critical viewpoint in investigating environmental conditions of committing crime is economic aspects of environment. In this research the impact of economic factors on crime in Iranian provenances during years 2000-2013 has been studied. To do this, panel smooth transition method (PSTR) has been used. With Inflation as a transition variable, PSTR results show existence of two regimes and a threshold value indicate that in the first regime (low level of inflation), real income per capita doesn't have a signification impact on crime, however, in the second regime (high level of inflation), the impact of real income per capita on crime is negative and signification. In low level of inflation, the impact of income inequality on crime is positive and signification but in high levels of inflation, this variable has no impact on crime. In low level of inflation, industrialization has an insignificant impact but its impact in high level of inflation is positive and signification. Unemployment in both regimes has significant and positive impact in crime.

Keywords

• crime
• economic conditions
• panel smooth transition