Academic journal article The American Journal of Economics and Sociology

Socioeconomic Conditions and Property Crime: A Comprehensive Review and Test of the Professional Literature

Academic journal article The American Journal of Economics and Sociology

Socioeconomic Conditions and Property Crime: A Comprehensive Review and Test of the Professional Literature

Article excerpt

I

Introduction

The economic theory of crime is a micro-theory which, postulating that a welfare maximizing individual optimally allocates resources according to relative returns, links socioeconomic conditions to the individual's relative returns to legal and illegal activity.(1) Sociological crime theories are more varied. Strain, ecology and opportunity theories relate adverse socioeconomic conditions affecting a group's social structure to the group's incentives and opportunities for criminal behavior. Social-control and learning theories link socioeconomic conditions to society's failure to control criminal tendencies and to the personal processes by which an individual learns criminal behavior (Hughes and Carter, 1981; Bernard, 1987; Brown, Esbensen and Geis, 1991). These diverse theoretical foundations provide varying (and sometimes conflicting) links between socioeconomic conditions and property crime.

This study contributes to the existing literature first by providing a review of the theoretical foundations and empirical evidence for the hypotheses relating property crime and socioeconomic conditions since no recent comprehensive review of economic and sociological theories and evidence is available. Second, the paper develops an empirical model to test these diverse theories that addresses several limitations in the empirical literature. To reduce specification error, the empirical analysis employs a set of socioeconomic measures, developed from the literature review, more comprehensive than those used by other time-series studies. Modern time-series estimation methods are used to reduce estimation error arising from techniques that do not correct for non-stationary and autocorrelated observations. In addition, data from the 1960s through the early 1990s are employed to reduce inconsistencies inherent in studies mixing pre- and post-1960s time-series data and to provide evidence not included in older studies. Based on the literature and the empirical analysis, the current relevance of factors hypothesized to cause criminal activity is ascertained for the individual categories of robbery, burglary, and vehicle theft.

II

Theory and Evidence

Absolute and Relative Poverty

Carroll and Jackson (1983, 179) state, "Central to most theories of crime ... is the idea that poverty or inequality is criminogenic." Economists generally associate an individual's absolute poverty (that is, real income being below a specific level) to the individual's expected benefits of legal and of illegal activity; therefore, absolute poverty may create the perception that one's skills are relatively more productive in criminal activity. In addition, Lott (1990) postulates that the poor are more likely to engage in criminal activity due to their relatively limited access to capital markets; therefore, property crime is the poor person's method of borrowing against future human capital. Deutsch, Spiegel and Templeman (1992), however, link absolute poverty to the return to crime by hypothesizing that the poor are more likely to engage in crime because the cost of judicial sanctions is less for a low income individual than for the high income individual who has more accumulated wealth to lose. Sociological theories state that absolute poverty, by straining the social structure of the lower class, by lowering guardianship and social control, and by generating opportunities to learn criminal behavior, leads to increased criminal activity (Hughes and Carter, 1981; Cohen, Kluegel and Land, 1981).

Using an economic model that includes both the individual's potential legal income and - as an estimate of the returns to crime - the general income level of others in the society, Ehrlich (1973, 538-40) and Deutsch, Spiegel and Templeman (1992) provide theoretical support for a link between an individual's relative poverty (that is, income being low in relation to some reference group) and criminal activity. …

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