Poverty, Urbanization and Crime: Are They Related in Pakistan?

Abstract

Purpose: This study attempts to analyze the possible impact of poverty; inflation, economic growth, and urbanization on crime for a developing economy like Pakistan. Methodology: This study applies autoregressive distributed lag model (ARDL) to find long term relationship and Granger causality test for finding direction of causality between crime and its determinants for the period from 1978 to 2011. Findings: The empirical findings of the study have exposed that poverty; economic growth and urbanization have a significant and positive impact on crime in both long and short terms. Moreover; the findings of the Granger causality test demonstrate bi–directional Granger causality between urbanization and crime and uni–directional Granger causality running from between economic growth and crime which runs from economic growth to crime. Recommendations: Policy recommendations have been provided.