Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2009:20: Are Crime Rates Really Stationary?

Westerlund Joakim () and Blomquist Johan ()
Additional contact information
Westerlund Joakim: Department of Economics
Blomquist Johan: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: Many empirical studies of the economics of crime focus solely on the determinants thereof, and do not consider the dynamic and cross-sectional properties of their data. As a response to this, the current paper offers an in-depth analysis of this issue using data covering 21 Swedish counties from 1975 to 2008. The results suggest that the four crime types considered are non-stationary, and that this cannot be attributed to county specific disparities, but rather that it is due to a small number of common stochastic trends to which groups of counties tend to revert. The results further suggest that these trends can be given a macroeconomic interpretation. Our findings are consistent with recent theoretical models predicting that crime should be dependent across both time and counties.

Keywords: Crime; Non-stationary data; Panel unit root tests; Common factor

JEL-codes: C32; C33; E20; K40

44 pages, December 21, 2009

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WP09_20.pdf PDF-file 

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