Income Inequality and Violent Crime : Evidence from Mexico’s Drug War

The goal of this paper is to examine the effect of inequality on crime rates in a unique context, Mexico's drug war. The analysis exploits an original dataset containing inequality and crime statistics on more than 2000 Mexican municipalities over a 20-year period. To uncover the causal effect...

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Main Authors:	Enamorado, Ted, López-Calva, Luis F., Rodríguez-Castelán, Carlos, Winkler, Hernán
Format:	Journal Article
Language:	en_US
Published:	Elsevier 2016
Subjects:	poverty income inequality crime Gini coefficient drug war drug trafficking
Online Access:	http://hdl.handle.net/10986/24872

id	okr-10986-24872
recordtype	oai_dc
spelling	okr-10986-248722021-05-25T10:54:40Z Income Inequality and Violent Crime : Evidence from Mexico’s Drug War Enamorado, Ted López-Calva, Luis F. Rodríguez-Castelán, Carlos Winkler, Hernán poverty income inequality crime Gini coefficient drug war drug trafficking The goal of this paper is to examine the effect of inequality on crime rates in a unique context, Mexico's drug war. The analysis exploits an original dataset containing inequality and crime statistics on more than 2000 Mexican municipalities over a 20-year period. To uncover the causal effect of inequality on crime, we use an instrumental variable for the Gini coefficient that combines the initial income distribution at the municipality level with national trends. Our estimates indicate that a one-point increment in the Gini coefficient between 2007 and 2010 translates into an increase of more that 36% in the number of drug-related homicides per 100,000 inhabitants. The fact that the effect found during the drug war is substantially greater is likely caused by the rise in rents to be extracted through crime and an expansion in the employment opportunities in the illegal sector through the proliferation of drug trafficking organizations (DTOs), accompanied by a decline in legal job opportunities and a reduction in the probability of being caught given the resource constraints faced by the law enforcement system. Combined, the latter factors made the expected benefits of criminal activity shift in a socially undesirable direction after 2007. 2016-08-10T18:59:10Z 2016-08-10T18:59:10Z 2016-05 Journal Article Journal of Development Economics 0308-3878 http://hdl.handle.net/10986/24872 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ World Bank Elsevier Publications & Research :: Journal Article Publications & Research Latin America & Caribbean Mexico
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	poverty income inequality crime Gini coefficient drug war drug trafficking
spellingShingle	poverty income inequality crime Gini coefficient drug war drug trafficking Enamorado, Ted López-Calva, Luis F. Rodríguez-Castelán, Carlos Winkler, Hernán Income Inequality and Violent Crime : Evidence from Mexico’s Drug War
geographic_facet	Latin America & Caribbean Mexico
description	The goal of this paper is to examine the effect of inequality on crime rates in a unique context, Mexico's drug war. The analysis exploits an original dataset containing inequality and crime statistics on more than 2000 Mexican municipalities over a 20-year period. To uncover the causal effect of inequality on crime, we use an instrumental variable for the Gini coefficient that combines the initial income distribution at the municipality level with national trends. Our estimates indicate that a one-point increment in the Gini coefficient between 2007 and 2010 translates into an increase of more that 36% in the number of drug-related homicides per 100,000 inhabitants. The fact that the effect found during the drug war is substantially greater is likely caused by the rise in rents to be extracted through crime and an expansion in the employment opportunities in the illegal sector through the proliferation of drug trafficking organizations (DTOs), accompanied by a decline in legal job opportunities and a reduction in the probability of being caught given the resource constraints faced by the law enforcement system. Combined, the latter factors made the expected benefits of criminal activity shift in a socially undesirable direction after 2007.
format	Journal Article
author	Enamorado, Ted López-Calva, Luis F. Rodríguez-Castelán, Carlos Winkler, Hernán
author_facet	Enamorado, Ted López-Calva, Luis F. Rodríguez-Castelán, Carlos Winkler, Hernán
author_sort	Enamorado, Ted
title	Income Inequality and Violent Crime : Evidence from Mexico’s Drug War
title_short	Income Inequality and Violent Crime : Evidence from Mexico’s Drug War
title_full	Income Inequality and Violent Crime : Evidence from Mexico’s Drug War
title_fullStr	Income Inequality and Violent Crime : Evidence from Mexico’s Drug War
title_full_unstemmed	Income Inequality and Violent Crime : Evidence from Mexico’s Drug War
title_sort	income inequality and violent crime : evidence from mexico’s drug war
publisher	Elsevier
publishDate	2016
url	http://hdl.handle.net/10986/24872
_version_	1764457876631322624

Income Inequality and Violent Crime : Evidence from Mexico’s Drug War

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