A Spatial Analysis to Permanent Income as Deterrent of Homicides: The Case of Medellin City

Posted: 6 Aug 2016

See all articles by Joaquin A Urrego

Joaquin A Urrego

World Bank - Office of the Chief Economist for Equitable Growth, Finance, and Institutions; Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF)

Catalina Gomez

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF)

Hermilson Velasquez

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF)

Date Written: May 4, 2016

Abstract

This paper studies the relationship between permanent income and homicides, estimating an income-crime elasticity. We assume that this elasticity varies across geographical areas. We estimate different specifications of Spatial Panel Models using information of urban areas in Medellin (Colombia), areas known as communes. Spatial Models consider the importance of location and the type of neighbors of each commune. We simulate an intervention over permanent income in order to estimate the income elasticity for each commune and the average elasticity of income-crime on the city. We provide evidence about spatial dependence between the homicides per commune and their neighbors, and about a relationship between homicides and neighbor’s income. In our case of study, the average estimated impact of 1% increase in permanent income in a specific commune produces a decrease in the homicide rate on average in 0.39%. Finally, permanent income plays a crime deterrent role, but also this effect of income on crime varies across the city, showing that some areas are strategically located to this kind of intervention.

Keywords: Permanent income, Homicides, Spatial panel, Elasticity

JEL Classification: K4, C23, R12, R23

Suggested Citation

Urrego, Joaquin and Gomez, Catalina and Velasquez, Hermilson, A Spatial Analysis to Permanent Income as Deterrent of Homicides: The Case of Medellin City (May 4, 2016). Center for Research in Economics and Finance (CIEF), Working Paper. Available at SSRN: https://ssrn.com/abstract=2817906

Joaquin Urrego (Contact Author)

World Bank - Office of the Chief Economist for Equitable Growth, Finance, and Institutions ( email )

Washington, DC 20433
United States
2024588378 (Phone)

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF) ( email )

Carrera 49 No. 7 South - 50
Medellin
Colombia

Catalina Gomez

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF) ( email )

Carrera 49 No. 7 South - 50
Bogotá
Colombia

Hermilson Velasquez

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF) ( email )

Carrera 49 No. 7 South - 50
Bogotá
Colombia

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