Analyzing the Impact of Economic and Social Dynamics on Crime Rates Using the System GMM Method
DOI:
https://doi.org/10.37241/jatss.2025.140Keywords:
system GMM, economic activities, social activities, crimeAbstract
Introduction: This study examines the impact of economic indicators—namely purchasing power, pollution levels, gross domestic product (GDP) growth rates, and the ratio of real estate prices to income—on crime rates. Given that these relationships may vary depending on regional differences or socio-political dynamics, a careful analysis of these factors is essential for developing effective policies and crime prevention strategies for decision-makers.
Method: The research investigates the relationships between indicators affecting crime rates (purchasing power index, pollution index, GDP growth rate, and ratio of real estate prices to income) and crime rates using annual data from 60 countries spanning the period 2018–2023. The causal relationship between variables was analyzed using the System Generalized Method of Moments (System GMM). To ensure sufficient observations for the System GMM methodology and enhance the model's predictive power, a comprehensive dataset encompassing the economic, social, and environmental diversity of the 60 countries was employed.
Results or Findings: The System GMM results indicate that the variables of purchasing power, GDP growth rate, pollution, and the ratio of real estate prices to income exert positive and statistically significant effects on crime rates.
Discussion or Conclusion: The findings suggest that punitive approaches alone may be insufficient in combating crime. A holistic strategy combining education, employment, environmental policies, and social support mechanisms could yield more sustainable solutions and provide a framework to interpret the results, draw conclusions, and describe implications for the real world and future research.
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