Research Methods and Technology
(Fallahi, Pourtaghi, & Rodriguez, 2012), studied the effect of unemployment rate and its volatility on Crime. The Researchers investigated that not only the unemployment rate but its volatility also affect the crime rate. Auto Regressive Conditional Heteroskedasticity (ARCH) models are used to characterize and model observed time series. They are used whenever there is reason to believe that, at any point in a series, the terms will have a characteristic size, or variance. In particular ARCH models assume the variance of the current error term or innovation to be a function of the actual sizes of the previous time periods ' error terms: often the variance is related to the squares of the previous innovations. Quarterly data on four types of crime and unemployment rate are used to investigate how the unemployment rate and its volatility might affect the crime.
The researcher, after gathering the data and examining the volatility of unemployment rate reached to the conclusion that the unemployment rate and its volatility have a significant impact on the crime rate. The unemployment rate affects the crime rate in short run whereas its volatility affects the crime rate beyond the limits and the time
The crimes fluctuation observed in the research paper were Motor-vehicle theft and Burglary. The statistics used for the study are taken from the FBI’s Uniform Crime Reports across the US from 1970 to 1993. They are then broken down according to types of crime and adjusted for poverty and demographic components. The author investigated the keywords like Unemployment Volatility, Crimes and Unemployment. The dependent variable is defined as the Crime Rate (CRIME). The independent variable is UNEMP (Unemployment Rate). When the lack of available opportunity exists to provide income and the means to provide for one self
References: * Cohen, L.E., Felson, M. and Land, K.C. (1980), “Property crime rates in the United States: a macro-dynamic analysis, 1947-1977; with ex ante forecasts for the mid-1980s”, American Journal of Sociology, Vol. 86 No. 1, pp. 90-118. * Howsen, R.M. and Jarrell, S.B. (1987), “Some determinants of property crime: economic factors influence criminal behavior but cannot completely explain the syndrome”, American Journal of Economics and Sociology, Vol. 46, pp. 445-57. * Raphael, S. and Winter-Ebmer, R. (2001), “Identifying the effect of unemployment on crime”, Journal of Law & Economics, Vol. 44, pp. 259-83.