Publication: Income Inequality and Violent Crime : Evidence from Mexico's Drug War
Date
2014-06
ISSN
Published
2014-06
Author(s)
Abstract
The relationship between income
inequality and crime has attracted the interest of many
researchers, but little convincing evidence exists on the
causal effect of inequality on crime in developing
countries. This paper estimates this effect in a unique
context: Mexico's Drug War. The analysis takes
advantage of a unique data set containing inequality and
crime statistics for more than 2,000 Mexican municipalities
covering a period of 20 years. Using an instrumental
variable for inequality that tackles problems of reverse
causality and omitted variable bias, this paper finds that
an increment of one point in the Gini coefficient translates
into an increase of more than 10 drug-related homicides per
100,000 inhabitants between 2006 and 2010. There are no
significant effects before 2005. The fact that the effect
was found during Mexico's Drug War and not before is
likely because the cost of crime decreased with the
proliferation of gangs (facilitating access to knowledge and
logistics, lowering the marginal cost of criminal behavior),
which, combined with rising inequality, increased the
expected net benefit from criminal acts after 2005.
Link to Data Set
Citation
“Enamorado, Ted; López-Calva, Luis-Felipe; Rodriguez Castelan, Carlos; Winkler, Hernán. 2014. Income Inequality and Violent Crime : Evidence from Mexico's Drug War. Policy Research Working Paper;No. 6935. © World Bank, Washington, DC. http://hdl.handle.net/10986/18825 License: CC BY 3.0 IGO.”
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