Does Income Inequality Fuel Homicides?

This study analyzes the relationship between income inequality and violent crimes, using a panel data for a sample of developed and developing countries. Income inequality is measured by the Gini index, while violent crimes are measured by the number of homicides per 100000 inhabitants. The period analyzed covers 35 years, from 1960 to 1995. In order to test Granger causality we regress each variable against its own lagged values and against the contemporaneus and lagged values of the other variable of interest. Our estimations, based on GMM techniques, suggest that income inequality positively Granger causes violent crimes. The same is true for the inverse relationship: violent crime positively Granger causes inequality. The results show a certain level of inertia in the evolution of dynamic of the variables of interest: past values matter in the realization of the present values. Our results confirm the findings of other papers and in particular they are coherent with the re...