Abstract
Using the time series data from 1984 to 2015, this study attempts to explore Sindh economic situation and the relationship between criminal activities. Three Variables are used for economic conditions, such as crime rate, dropout ratio and unemployment. We check their relationship with the reported crime. Enhanced Dicky Fuller test for unit root process indicates that all variables are stationary at the first level. For long-term relationships, Johanson-Cointegration technology has been applied. The results of the statistical process show that dropout ratio and unemployment are closely related to crime.VCM has been applied to check the short-run relationship between the variables. VCM results suggested that the model we estimate is divergent. Divergent model mean that there is no adjustment from long-run to short-run between variables as they are going away, if we increase the lag length, the model can become divergent but due to crime data unavailability it was difficult to increase the observations and the lags as well. Study gives evidence that economic conditions have significant impact on crimes and increasing dropout which is Positive related with crime in Sindh. It is also shown that the crime is influenced by economic condition. Government is capable to reduce that threat through effective target policies and legislation. The empirical results of this study will enhance understanding of the role of public sector policy formation in promoting national productive capacity by uplifting the positive effect of the Sindh economy.
Highlights
This paper examines the impact of economic condition on crime in the long run as well as in short run
According to results, decreasing the number of dropout are associated with significance decrease in number of crime in the Sindh and the effect of increasing enrollment appears to be dependent on economic context
The trend analysis shows that political instability, institutional corruption, unemployment, education and employment policies are the main factors of high crime rates in Sindh province
Summary
Machin (1998) reported negative relation between economic incentives and criminal activities. Becker (1968) contribution is the major in the economics of the crime He explored that person will commit crime if he gets higher expected return from crime than illegal activity. The incentive for the criminal activities increases with the unemployment, zero income and low income makes the cost benefit analysis easy for the individual (Fleisher, 1963). Various reasons supports that education reduce the criminal activities, first schooling increases the return to legitimate work and raising opportunity cost of illegal behavior (Freeman, 1996) punishment for the criminal behavior often entails incarceration. On the other hand unemployment, through the aggregate demand channel affects economic growth. Most industrialized province of Pakistan is Sindh and in the provincial economy shore of industrial sector is much higher than the national average.
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