The Effects of Macroeconomic Evils on Property and Violent Crimes in Malaysia

6882 Words Jun 29th, 2016 28 Pages
International Journal of Business and Society, Vol. 11 No. 2, 2010, 35 - 50

Chor Foon Tang♣
University of Malaya

The main objective of this study is to investigate the effects of macroeconomic evils – unemployment and inflation on different categories of crime rates – property and violent crimes in Malaysia via the multivariate Johansen-Juselius and Granger causality techniques. This study used annual data from 1970 to 2006. Johansen-Juselius cointegration tests revealed that property and violent crimes are cointegrated with unemployment and inflation. Furthermore, the empirical evidence exhibit that unemployment and inflation are the
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Among that, property crime consists of more than 140 thousand cases, while violent crimes almost achieved 25 thousand cases. Eventually, the criminal cases in
Malaysia further increased to 198 thousand cases in year 2006.

Corresponding Author: Department of Economics, Faculty of Economics and Administration, University of Malaya, 50603 Kuala
Lumpur, Malaysia. Email:


The Effects Of Macroeconomic Evils On Property And Violent Crimes In Malaysia

Crime is a vital source of insecurity and discomfort in every society and hence it is a common indicator of the political stability and the level of public security of a country. The robust increase of crime rates in Malaysia represents poor public security and political instability, igniting public awareness to control the problem with immediate effect. For this reason, it is impetus to establish an empirical study to shred valuable information to the policymakers to combat criminal activities in Malaysia.
Figure 1: The plots of natural logarithm of crimes rates

Empirical studies on the economics of crime have mainly concentrated on developed economies such as Australia, the United States, and the United Kingdom (e.g., Masih and Masih, 1996;
Carmichael and Ward, 2001; Narayan and Smyth, 2004; Tang and Lean, 2007a, 2009). Therefore, empirical works on the

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