Jealous of the Joneses: Conspicuous Consumption, Inequality, and Crime

33 Pages Posted: 20 Oct 2012  

Daniel L. Hicks

University of Oklahoma - Department of Economics

Joan Hicks

University of California, Berkeley - Center for Effective Global Action (CEGA)

Date Written: September 1, 2012

Abstract

Empirical research on the relationship between economic inequality and crime has focused on income inequality, despite the fact that income is not easily observed. We extend this literature by shifting the focus from income to its visible manifestation – conspicuous consumption. Using variation within U.S. states over time, we document a robust association between the distribution of conspicuous consumption and violent crime. Our results link violent crime to inequality in visible expenditure, but not to inequality in total expenditure, suggesting that information plays a key role in the determination of crime. Furthermore, the relationship between violent crime and visible expenditure inequality appears more robust than that between crime and income inequality. In addition, we show that focusing on conspicuous expenditure also allows for new tests of competing theories of crime. Our results are consistent with social theories which link crime with relative deprivation, but provide little support for traditional economic theory.

Keywords: Conspicuous Consumption, Inequality, Crime

JEL Classification: E21, E25, K42, D31, D8

Suggested Citation

Hicks, Daniel L. and Hicks, Joan, Jealous of the Joneses: Conspicuous Consumption, Inequality, and Crime (September 1, 2012). Available at SSRN: https://ssrn.com/abstract=2164456 or http://dx.doi.org/10.2139/ssrn.2164456

Daniel Lee Hicks (Contact Author)

University of Oklahoma - Department of Economics ( email )

729 Elm Avenue
Norman, OK 73019-2103
United States

Joan Hicks

University of California, Berkeley - Center for Effective Global Action (CEGA) ( email )

207 Giannini Hall
Berkeley, CA 94720-3310
United States

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