Keeping up by robbing the Joneses

ABSTRACT

In this article, we find evidence of a ‘keeping up with the Joneses’ effect in the relationship between inequality and crime in Italy. We use data on minor and major crimes in the 20 Italian regions in the years 2004–2015 and show that for higher (lower) income levels, inequality leads individuals to commit major (minor) crimes to try to keep up with richer people.

KEYWORDS:

• Inequality
• crime
• other-regarding preferences
• Italy

JEL CLASSIFICATION:

• D31
• D63
• C23

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ More recently, this peer-group externality has mostly been incorporated into asset-pricing models. See, for example, Abel (1990) and Galí (1994).

² Criminal behaviour may result not only from inequality of incomes (i.e. outcomes), but more generally from inequality of opportunities, such as access to education, health services and labour markets (see Roemer 1998). In our analysis, we control for specific socio-economic geographic variables, which can be related to the role of inequality in opportunities.

³ Data are provided by the cross-sectional and longitudinal sample survey EU-SILC (Statistics on Income and Living Conditions), coordinated by Eurostat.

⁴ Although we provide a robust association between inequality and magnitude of crime according to the size of income gap (which is in line with part of the previous theoretical and empirical literature), our research design and the level of analysis do not allow to test and address the causality issue. We leave for future research a more thorough analysis on this topic with disaggregated data at sub-regional level, not available at present.