Crime rates, male youth unemployment and real income in Australia: evidence from Granger causality tests

Abstract

This article applies Granger causality tests to examine the relationship between seven different categories of property crime and violent crime against the person, male youth unemployment and real male average weekly earnings in Australia from 1964 to 2001 within a cointegration and vector error correction framework. It is found that fraud, homicide and motor vehicle theft are cointegrated with male youth unemployment and real male average weekly earnings. However, there is no evidence of a long-run relationship between either break and enter, robbery, serious assault or stealing with male youth unemployment and real male average weekly earnings.

Acknowledgements

An earlier version of this article was presented at the 32nd Annual Conference of Economists, Canberra September 2003. We thank Hashem Pesaran and Yongcheol Shin for sharing the GAUSS codes they used to produce the original set of critical values for the bounds testing approach to cointegration as reported in Pesaran and Pesaran (1997) and Pesaran et al. (2001).

Notes

Scorcu and Cellini (1998) are an exception. They use the Gregory and Hanson (1996) approach to cointegration which accommodates a structural break.