|M.Sc Student||Geryes Nader|
|Subject||Analysis of Crime in Israel by Counties|
|Department||Department of Industrial Engineering and Management||Supervisor||Professor Avner Bar Ilan|
|Full Thesis text - in Hebrew|
This study examines the relationship between crime and other socio-economic factors, by using panel data for the Israeli districts, over the years 1990-2004.
The main interest of this study lies on the effect of the unemployment rate on property crime rate. For the sake of comparison it also examines the effect of unemployment rate on violent crime rate. By doing so, this study has attempted to investigate the effects of other relevant variables.
Dealing with the specific problems that usually arise in studies concerning the relationship between unemployment and crime, the paper uses a cross-sectional fixed effect, linear and quardratic time trends. In addition, it uses socio-economic and demographic variables, as the income level, the educational level, the population density, the young population rate and the rate of immigrants.
The results of this analysis show that unemployment had a positive and significant effect on the aggregate property crimes. It can be concluded that an increment of 1 percentage point in the unemployment rate is estimated to increase property crime by 3-6 percent. Moreover, this study finds that unemployment affects certain types of property crime, as burglary and robbery. On the other hand, the results do not indicate that there is a significant or consistent statistic correlation between unemployment and violent crime. Similar results can be concluded for specific types of violent crime as murder, sabotage, assault and sexual crime.
Concerning with the effects of other independent variables used in this analysis, it can be concluded that a higher clear-up rate is estimated to decrease property crime rate. A similar result can be concluded about the income effect. Regarding the remained variables, the results don’t show a consistent and significant correlation with crime rate.
This study applies Granger Causality test to study the causation relationship between unemployment and crime. This test has been used in this study in two directions. In the first direction it can be concluded that increases in the rate of unemployment Granger cause property crimes. On the other hand no Granger causality is found in the opposite direction. Applying the Granger Test on violent crime shows that neither unemployment causes violent crime nor violent crime causes unemployment.
A major finding in this paper is the significant positive relationship between the rate of unemployment and crime rates. Therefore, a policy designed to reduce unemployment in Israel could also lead to reduction in the rate of property crime.