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THE NEXUS BETWEEN POVERTY AND CRIME: EVIDENCE FROM INDIA
Abstract
This paper tests the theoretical relationship between poverty and crime in India. The motivation is the U.S. diplomatic reports on crime that indicated violent crime rates in India increased by 15.1% even though poverty rate decreased by 0.625% within the same period. To explore the relationship between crime and poverty the standard time series techniques are applied. India is taken as a case study. The results indicate that there is a co-integration between crime and poverty. However, crime is found to be more exogenous than poverty. This finding corroborates with earlier studies in the literature that poverty plays insignificant role in driving crime but crime may keep people in poverty due to factors such as, crime record and education. The implication of the result is that the Indian government needs to strengthen the criminal justice system to fight crime while ensuring a fair distribution of wealth.
Keywords: Crime, Poverty, VECM, VDC, India