South Asian Studies, Vol 2, No 35 (2020)

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Macroeconomic Determinents of Crime in South Asian Countries: A Panal Data Approach

Rana Hamza Gull, Kauser Perveen, Ameer Bakhsh Basit

Abstract


This research explores the economic determinants of crime in case of a panel of South Asian countries (Pakistan, India, Sri Lanka and Bangladesh). To empirically determine the relationship between crime and its determinants, data for the concerned variables are collected for the period of 2003 to 2017 from different sources like World Development Indicator (WDI), National Police Survey and UNESCO. In this study, education, economic growth, population and unemployment are used as the determinants of crime. To find out the relationship Random Effect Model (REM) and Fixed Effect Model (FEM) models are constructed. After applying diagnostic test, it is found that Fixed Effect Model is appropriate. But the FEM model violates the assumptions of classical linear regression model (CLRM) because there is hertoscedasticity and autocorrelation problem in the data. To robust these problems, feasible generalized least square (FGLS) model has been applied. The results of FGLS revealed that education has negative and significant impact on crime. Contrary, population, economic growth and unemployment have positive and significant impact on crime. The study recommends that government should give preference to education sector. On the other hand, government should control the population growth and unemployment rate.

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