A Study on Relationship between Tourist Arrivals, Inflation, and Unemployment with Crime Rates in Malaysia

Abstract

Purpose – The main purpose of this study is to examine the dynamic relationship between tourist arrivals, inflation, and unemployment with crime rates in Malaysia. This study covered the annual data of Malaysian listed organizations from 1998 to 2012. Design/Methodology/Approach – The data were collected from Malaysian listed organizations from 1998 to 2012, and analyzed using multiple linear regression analyses to determine the causal relationship between crime rate and its determinants. Findings – The multiple linear regression analysis result reveals that the variables are co-integrated and the dynamic ordinary least squares estimator suggest that unemployment, inflation and tourist arrivals are positively related to crime rates in Malaysia. For multiple linear regressions in the long-run, tourist arrivals, inflation, and unemployment cause crime rates in Malaysia. Originality/Value – The estimated crime rate function for Malaysia demonstrated that promoting supply-side economy and also increases the numbers of police and patrolling duties in the potential crime areas will reduce the crime rate in Malaysia and in the same time attract more tourist arrivals to Malaysia.