Crime, Inequality and Unemployment in England and Wales

A model of crime is developed based on principles from the existing literature with some original insight. The implications of the model are that income inequality and unemployment are important explanatory variables for crimes motivated by economic gain, but do not offer much explanatory power for other types of crime. A panel data of UK regions over the years from 2002 to 2007 is then used to test these predictions. The empirical results strongly support the hypothesis that crime is an economic phenomenon.