Crime Rates: an Econometric Analysis

Topics: Regression analysis, Statistical hypothesis testing, Econometrics Pages: 17 (4672 words) Published: August 27, 2013
Crime Rates: An Econometric Analysis using population, unemployment and growth

Table of Contents
I. Introduction
A.) Background of the Study
B.) Problem Statement
C.) Objectives
D.) Significance of the Study
E.) Scope and Limitations
II. Review of Related Literature
III. Operational Framework
A.) Variable List
B.) Model Specification
C.) A-priori Expectations
IV. Methodology
A.) Data
B.) Preliminary Tests
V. Results and Discussions
VI. Conclusion and Recommendations
VII. Bibliography
VIII. Appendices

A. Background of the Study

Ever since the first civilizations, ever since the dawn of government and morals, crime has accompanied mankind in his everyday life. Whether it is in the streets or at home, in the office or in workplace, crime is always present. Since then, governments have exhausted billions of dollars in order to eradicate crime. Unfortunately, crime cannot be totally eradicated, unless that world or country is a utopia.

Here in the Philippines, crime is one of the most problematic dilemmas. However, in the midst of volatile economies, wars, corruption, poverty, and other more urgent problems, crime loses its significance, letting nature take its course unfazed by some if not no government intervention. It is then relegated to the bottom of the long list of problems that we experience here in the Philippines. Moreover, because it has become a part of our everyday lives, it has become a common societal phenomenon, viewed by some as a normal symptom, as if it were a functional component of the organization of human groupings. (Schafer, 1976)

Inefficient policies by the government have caused the Philippines to have high crime rates, and be a hub for international drug traffickers. Mongabay (n.d.) explains that the number of serious crimes dramatically increased through the early 1980s and dipped to below 250 crimes per 100,000 in 1989. According to (n.d.), “Government officials attributed the decrease in crime to improved police work, but economic conditions appeared to be as important. The deterioration in law and order during the early and mid-1980s accompanied a steadily worsening economy, whereas the improvement in the late 1980s paralleled renewed economic growth under Aquino. Not surprisingly, crime rates were highest in major urban areas, where unemployment was the highest. Regionally, peninsular southern Luzon, the western Visayan islands, and portions of Mindanao--impoverished rural areas where insurgents were active--had the most criminal activity in the mid-1980s.”

This leads the researcher to ask how economic conditions factor in the rise and fall of crime rates. Do economic conditions really affect crime rates or is it the raising efficiency of government actions?

B. Statement of Problem
Despite numerous studies identifying factors that contribute to determining crime rates, none hold totally true as crime is not only affected by economic conditions but by psychological and governmental actions. Moreover, annual data of Philippine economic variables are limited, most of which have been recorded through different methods causing data to be incomparable.

C. Objectives
The general objective of the study is to estimate and present an overall picture of crime rate trends in the Philippines for a period of 31 years (1978 - 2008) Specifically, it aims to:
1.1) Measure contribution of economic variables to crime rates D. Significance of the Study
By being able to estimate the contribution of economic variables to crime rates, the Philippine government can reduce crime from its economic roots. As we all know, crime rates affect tourism in a country which can increase growth of a country. By reducing crime rates government may create a peaceful and stable economy that will please the international markets causing a boom for the Philippine economy.

E. Scope and Limitations...

Bibliography: The general objective of the study is to estimate and present an overall picture of crime rate trends in the Philippines for a period of 31 years (1978 - 2008)
Specifically, it aims to:
Wadsworth (2001), on the other hand, states that employment is a key factor that affects crime rates. It is not the fact of unemployment that pushes them into being criminals but the hardships that they experience.
The data used in this study was retrieved from the Philippine Statistical Yearbook (1981, 1991, 2001, and 2009) and the World Bank (2011) Database.
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