Crime and Local Inequality in South Africa

We examine the relationship between crime and local economic welfare in South Africa. Unlike previous studies, which use a much larger unit of analysis, we utilize data from 1066 police station jurisdictions. We find that inequality is strongly correlated with both property crime and violent crime. Once controls for the opportunity cost and benefits of crime participation are introduced, this correlation is substantially reduced for property crimes, while violent crimes remain strongly associated with inequality. Returns from crime, measured by mean per capita expenditure in the community, are strongly correlated with property crimes, and communities that are the richest among their neighbors experience significantly higher levels of residential burglary. Additionally, inequality between racial groups has no association with violent crime. The results are consistent with sociological theories that imply that inequality leads to violent crime. They also indicate that inequality is correlated with property crime chiefly through its association with the differential returns from such crime and that individuals may travel to commit property crimes. Finally, the evidence presented here is at odds with the notion that it is mainly the inequalities between racial groups that foster interpersonal conflict.