The Effects of Poverty on the Susceptibility to Crime in South Africa
44 Pages Posted: 26 Oct 2008 Last revised: 29 Aug 2014
Date Written: January 2009
Crime is a major economic and social problem in most developing countries. However, the research devoted to victims is sparse. This paper examines the effects of household-level poverty, measured by household expenditures per capita, on the susceptibility to crime in South Africa. An instrumental variables strategy combined with community fixed effects are used to account for potentially endogenous expenditures and unobserved community heterogeneity, respectively. Across all model specifications the probability a South African household is robbed is increasing in expenditures. When using instrumental variables, the positive effect of expenditures on the susceptibility to robbery increases substantially. In addition, the effect of expenditures remains positive and significant if the sample is restricted to “nonwhite” areas. This suggests that robberies are not only a problem for the rich who live in gated communities and hire private security, but also for the relatively “wealthy” that reside in poorer neighborhoods. Finally, this paper fails to find a statistically significant relationship between expenditures and the susceptibility to violent crimes such as murder, rape, and assault.
Keywords: Poverty, Crime, Victimization, Africa, South Africa
JEL Classification: D10, I30, K40, K42, O55
Suggested Citation: Suggested Citation