The effects of crime on the Mexican economy: A vector error correction model

Diana L. Carreon-Guzman, Jorge Garza-Rodriguez, David R. Garza-Turrubiates, Ricardo A. Gonzalez-Camargo, Eugenio Lozano-Castillo

Resultado de la investigación

Resumen

The aim of this study was to examine the extent to which crime affects the components of aggregate demand and vice versa for the case of Mexico, using quarterly data for the number of homicides and the components of aggregate demand for the period from 1990 to 2010. We estimated a Vector Error Correction Model in order to be able to distinguish the short run and long run dynamics present between crime and aggregate demand and its components. In the short run, it was found that none of the components of aggregate demand affect crime and that the only component of aggregate demand affected by crime is private consumption, which is affected negatively by an increase in the crime rate. It was also found that crime has a positive effect on GDP, government consumption and imports in the long run. On the other hand, private consumption, investment and exports have a negative effect on crime in the long run. Thus, the results obtained in this study indicate the existence of a bidirectional relationship between crime and economic activity in Mexico.
Idioma originalEnglish
Páginas (desde-hasta)959-967
Número de páginas9
PublicaciónEconomics Bulletin
Volumen35
N.º2
EstadoPublished - 1 ene 2015

Huella dactilar

Vector error correction model
Crime
Aggregate demand
Short-run
Mexico
Private consumption
Homicide
Crime rates
Economic activity
Government consumption
Import

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

Citar esto

Carreon-Guzman, D. L., Garza-Rodriguez, J., Garza-Turrubiates, D. R., Gonzalez-Camargo, R. A., & Lozano-Castillo, E. (2015). The effects of crime on the Mexican economy: A vector error correction model. Economics Bulletin, 35(2), 959-967.
Carreon-Guzman, Diana L. ; Garza-Rodriguez, Jorge ; Garza-Turrubiates, David R. ; Gonzalez-Camargo, Ricardo A. ; Lozano-Castillo, Eugenio. / The effects of crime on the Mexican economy: A vector error correction model. En: Economics Bulletin. 2015 ; Vol. 35, N.º 2. pp. 959-967.
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Carreon-Guzman, DL, Garza-Rodriguez, J, Garza-Turrubiates, DR, Gonzalez-Camargo, RA & Lozano-Castillo, E 2015, 'The effects of crime on the Mexican economy: A vector error correction model', Economics Bulletin, vol. 35, n.º 2, pp. 959-967.

The effects of crime on the Mexican economy: A vector error correction model. / Carreon-Guzman, Diana L.; Garza-Rodriguez, Jorge; Garza-Turrubiates, David R.; Gonzalez-Camargo, Ricardo A.; Lozano-Castillo, Eugenio.

En: Economics Bulletin, Vol. 35, N.º 2, 01.01.2015, p. 959-967.

Resultado de la investigación

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AU - Carreon-Guzman, Diana L.

AU - Garza-Rodriguez, Jorge

AU - Garza-Turrubiates, David R.

AU - Gonzalez-Camargo, Ricardo A.

AU - Lozano-Castillo, Eugenio

PY - 2015/1/1

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N2 - The aim of this study was to examine the extent to which crime affects the components of aggregate demand and vice versa for the case of Mexico, using quarterly data for the number of homicides and the components of aggregate demand for the period from 1990 to 2010. We estimated a Vector Error Correction Model in order to be able to distinguish the short run and long run dynamics present between crime and aggregate demand and its components. In the short run, it was found that none of the components of aggregate demand affect crime and that the only component of aggregate demand affected by crime is private consumption, which is affected negatively by an increase in the crime rate. It was also found that crime has a positive effect on GDP, government consumption and imports in the long run. On the other hand, private consumption, investment and exports have a negative effect on crime in the long run. Thus, the results obtained in this study indicate the existence of a bidirectional relationship between crime and economic activity in Mexico.

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Carreon-Guzman DL, Garza-Rodriguez J, Garza-Turrubiates DR, Gonzalez-Camargo RA, Lozano-Castillo E. The effects of crime on the Mexican economy: A vector error correction model. Economics Bulletin. 2015 ene 1;35(2):959-967.