An Econometric Analysis of Crime Determinants in Nigeria

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An Econometric Analysis of Crime Determinants in Nigeria

ABSTRACT

This paper attempts to investigate the impact of some macro-economic variables such as absolute poverty, unemployment rate, inflation rate, lending interest rate and population growth rate on crime level in Nigeria. The study uses annual time series data of the six listed variables from 1970–2015. The unit root and stationarity properties of the series are examined using Augmented Dickey-Fuller (ADF) unit root test. Johansen cointegration, FMOLS, error correction model as well as Granger causality test based on Toda-Yamamoto procedure are employed to find the long-term relationship, impact of study variables on crime, the long-run and short-run dynamics, speed of adjustment as well as causality among study variables. The results shows that all variables are integrated of order one and hence cointegrated. The study finds population growth, unemployment, poverty and inflation as having positive and significant impact on crime level in Nigeria. The Error Correction Model identified a sizable speed of adjustment by 93.20% for disequilibrium correction annually for attaining long-run equilibrium steady state position. The Granger causality test results revealed that crime is Granger caused by population growth, absolute poverty, unemployment, inflation and lending interest rate in Nigeria. The study provides some policy recommendations.

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