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Assessing the impact of economic and demographic change on property crime rates in Western Canada

   

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ORIGINAL RESEARCH

Assessing the impact of economic and

demographic change on property crime rates

in Western Canada

Stuart Wilson*

ABSTRACT

Western provinces have experienced tremendous change over the last few decades, with oil booms and busts, with large

international and interprovincial movement of workers and families, and with rising and declining property crime

rates. What are the links between these economic, demographic, and crime rate changes? I investigate these links for

Western Canada over the period from 1968 to 2015. Empirical results suggest that increases in household incomes and

alcohol sales per capita, and decreases in unemployment rates, all signs of improved economic prosperity, coincided

with decreases in rates of property crime. Increases in migration turnover (both inward and outward migration) put

upward pressure on rates of property crime. In addition, changes in police reporting methods and categorization have

had dramatic effects on official rates of property crime: the change from UCR1 to UCR2 reporting methodology caused

rates of property crime to rise by between 18 per cent and 30 per cent in 1998, and changes in police reporting methods in

2003 caused property crime rates to rise again, by between 5 per cent and 16 per cent in 2003, for the western provinces.

The recent rise in rates of property crime in the west is closely linked to the economic slowdown following the drop in

oil and resource prices, and should migration turnover rates remain high as people move seeking better opportunities,

property crime rates will remain high. Policymakers and criminal justice professionals may be advised and reminded

of the effect of these economic and demographic changes, as well as the effect of reporting changes, on official rates

property crime.

Key Words
Crime rate trends; economic growth; demographic change; police reporting.
Journal of CSWB. 2018 Oct;3(2):52-58 www.journalcswb.ca

INTRODUCTION

Crime rates trended downwards from 2003 to 2013 in western

Canada, coinciding with an international resource boom.

In particular, Saskatchewan experienced sharp increases

in resource development, household income, and large in-

migration movements, from both other provinces and nations,

during a period termed the “Saskaboom”. Rapid economic

and demographic change can have various effects on crime.

Newcomers may have different behaviours and propensities

to commit certain types of crimes. Improved employment

outcomes of young males may reduce criminal activity.

Inequalities in employment, incomes, and housing may lead

to increased crime. Over the past few years with the decline

in oil prices and revenues, some western Canadian provinces

have experienced poor economic growth and increasing

unemployment rates. What influence have demographic and

economic changes had on crime rate patterns in the western

Canadian provinces?

The economic factors that have been found to influence

crime include changes in unemployment, in incomes, in

inflation, in inequality, and in alcohol consumption (Cook

& Zarkin, 1985; Raphael & Winter-Ebmer, 2001; Savoie, 2008;

Pernanen, Cousineau, Brochu et al., 2002; Bunge, Johnson,

& Balde, 2005, Andresen, 2013 among others). Research

investigating the demographic factors that influence crime

have tended to concentrate on the youth and migrant popu
-
lations (Butcher & Piehl, 1998; Bunge et al., 2005; Kitchen,

2007; Stevens, Odynak, Brazil et al, 2011; Plecas, Evans, &

Dandurand, n.d.). For more extensive reviews of the influ
-
ences on crime, readers are encouraged to refer to Levitt

(2004), Albertson & Fox (2012), Farrell, Tilley & Tseloni (2014),

Tonry (2014), and Wilson, Sagynbekov, Pardy et al. (2015).

Tonry (2014) wrote that overall, there may be a role for

economic and demographic forces in explaining property

crime rate patterns over time, but little support for their influ
-
ence on violent crime rate patterns. Recent work by Wilson

(2017) supported this assessment by showing that economic

Correspondence to:
Stuart Wilson, Department of Economics, University of Regina, 3737 Wascana Parkway, Regina, SK S4S 0A2, Canada.
E-mail:
Stuart.Wilson@uregina.ca
J
ournal of
COMMUNITY SAFETY & WELL-BEING
Assessing the impact of economic and demographic change on property crime rates in Western Canada_1

IMPACTS OF ECONOMIC/DEMOGRAPHIC CHANGE ON PROPERTY CRIME RATES, Wilson53© 2018 Author.OpenAccess.ThisworkislicensedundertheCreativeCommonsAttribution-NonCommercial-NoDerivatives4.0 InternationalLicense.
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4.0/. For commercial re-use, please contact marketing@multi-med.com.

and demographic change could help explain only minor

changes in rates of violent crime, but may help explain up to

40 per cent of the changes in rates of property crime in west
-
ern Canadian provinces over the last five decades. This article

further focuses on assessing the economic and demographic

influences on property crime in western Canada.

METHODS

Police-reported crime data are available for Canadian prov
-
inces starting in 1962. The rates of property crime from 1962

to 2015 are depicted in Figure 1. Bunge et al. (2005) conducted

time-series analyses on the influences on crime over 1962 to

2003 for Canada as a whole. This study serves as an extension

of their work, with a larger time period, and with a larger

dataset by pooling together data for the five provinces west

of Quebec in a panel analysis.
1 This study also serves as an
extension of Wilson (2017) in three ways: (i) some explanatory

variables, including inflation, were dropped due to statistical

insignificance; (ii) the model allows for a singular focused

effect of migration turnover on property crime, motivated

by results which suggested that increases in interprovincial

and international migrant movement, both inward and out
-
ward, had similarly positive impacts on property crime, and;

(iii) the analysis incorporates data from the more recent

period characterized by low resource prices.

The relationship between rates of property crime and

the economic and demographic variables for the panel of

five provinces (British Columbia, Alberta, Saskatchewan,

Manitoba, and Ontario) is investigated using a linear panel

model. The set of provincial economic and demographic

variables used in the analysis are described in Table 1. These

variables are real household disposable income per capita,

the unemployment rate, per capita alcohol sales, the youth

share of the population, and the migration turnover rate

(the sum of both in- and out-migration, as a proportion of

the total population). Provincial data for unemployment

rates are only available starting in 1967. These variables all

exhibit the property of nonstationarity, and therefore require

transformation using logarithmic first differences to allow for

estimation to overcome the problems of stochastic trends and

spurious regressions; as such, this study may not be directly

compared to that of Andresen (2013), which presented results

from a panel study with variables in their undifferenced

logarithmic forms.
2 In addition, a set dummy variables was
used to account for additional province-specific trends and

shifts in rates of property crime. The effective time period of

the study is from 1968 to 2015.

RESULTS

The results from the panel regressions for the growth in the

rates of property crime over the study period are presented in

Table 2. The first regression model includes contemporaneous

and lagged independent variables, and a common constant

term but with no other dummy variables. The estimates

from that model are presented in Column 2, are identified as

Model 1, and indicate how much variation may be accounted

for solely by variation in the independent variables. The

estimated fit of this first model is relatively low, with an

overall R
2 of 0.18, indicating that the explanatory variables
used in this regression may account for a small portion of

the variation in the growth of the rates of property crime

over the sample. Only one variable, the unemployment rate,

was statistically significant in the regression. The second

regression model includes province-specific constant terms,

and province-specific one-period and trend shift dummies

which allow for trend changes that occurred around 1990, for

an upward shift in 1998 with the movement to UCR2 report
-
ing, and also for changes around 2003 (see notes to Table 2).

The estimates from this model are identified in Column 3

as Model 2. This second regression performed much better

in terms of the R
2 statistic. The inclusion of these province-
specific dummy variables allows the model to measure the

impact of economic and demographic changes on property

crime rates with better precision, and all of the economic and

demographic variables have statistically significant effects on

property crime rates, either contemporaneously, with lagged

effects, or both. This model indicates how important it is to

include these province- and time-specific effects to better

identify the relationship between economic and demographic

change, and changes in rates of property crime.

Influence of Economic and Demographic Change on

Rates of Property Crime

The estimates provided in Table 2 for Model 2, of the impact

of economic and demographic changes on rates of property

crime, will first be explained using a few illustrative exam
-
ples. The coefficient estimates of -0.1214 and -0.2232 for
Δyt
and
Δyt-1 suggest that for every one percentage point increase
in the growth rate of real disposable household income per

capita, the growth rate of the rate of property crime decreased

by 0.12 percentage points, and the growth rate of the rate of

property crime decreased by 0.22 percentage points in the

following period, all else equal. The coefficient estimates of

1.1038 and 0.1322 for
Δyouth-sharet and Δyouth-sharet-1 suggest
1
Panel dataset estimation provides several advantages over individual
time series estimation, including “more informative data, more variabil
-
ity, less collinearity among the variables, more degrees of freedom and

more efficiency” (Baltagi, 2005, p. 5).

2
Nonstationary series, including the undifferenced series in this analy-
sis, exhibit stochastic trends which may lead such series to appear to

be related over the long run when they aren’t, resulting in a spurious

regression. For more information on issues regarding nonstationar
-
ity and spurious regressions, please refer to Stock and Watson (2003,

pp. 460–462).

FIGURE 1
Rates of property crime, four western provinces and Ontario,
1962–2015.

-­‐
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
9,000.00
10,000.00
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
Incidents per 100,000 residents
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
Assessing the impact of economic and demographic change on property crime rates in Western Canada_2

IMPACTS OF ECONOMIC/DEMOGRAPHIC CHANGE ON PROPERTY CRIME RATES, Wilson54© 2018 Author.OpenAccess.ThisworkislicensedundertheCreativeCommonsAttribution-NonCommercial-NoDerivatives4.0 InternationalLicense.
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that for every one percentage point decrease in the growth

rate of the share of youth aged 15 to 24 years to the total

population, the growth rate of the rate of property crime

decreased by 1.10 percentage points, and the growth rate of

the rate of property crime decreased by 0.13 percentage points

in the following period, all else equal. While the other specific

estimates themselves are of importance, it is appropriate and

convenient to continue the analysis focusing on the direction

of the influences of these variables on rates of property crime

for the purpose of simplicity and ease of presentation.

As noted in one of the illustrative examples above, the

empirical results indicate that there were negative contem
-
poraneous and lagged relationships between changes in

disposable income and changes in rates of property crime.

In addition, there was a strong positive contemporaneous

link between unemployment rates and property crime rates;

however, that impact was partially muted with a counter
-
acting negative effect of lagged unemployment rates. These

results strongly suggest that improvements in the economy

coincided with declines in rates of property crime, and that

increases in property crime rates occurred during poor

economic conditions, supporting a motivational effect of the

economy on crime. Rates of property crime were also found

to be negatively linked with contemporaneous and lagged

changes in per capita alcohol sales. This result runs counter

to the hypothesis that alcohol consumption and crime are

positively linked, given a high proportion of crime is com
-
mitted by individuals dependent and under the influence of

alcohol and drugs (Pernanen et al., 2002). However, alcohol

sales were positively correlated with disposable income, and

are more likely a sign of increasing wealth and responsible

alcohol consumption, so that these results reinforce the infer
-
ence that increasing prosperity leads to declines in the rate

of property crime.

Demographic change also had an influence on rates of

property crime. Changes in the proportion of youth in the

population and in the rate of migration turnover (both of

inward and outward migration) were positively linked to

changes in property crime. These results reinforce the age–

crime link with adolescents committing a high proportion

of crime in society (Gannon, Mihorean, Beattie et al., 2005;

Brennan, 2012), and over the past decade while property

crime rates have been falling, the proportion of youth in the

population has also been in decline. While much international

work has focused on the impact of immigrant populations on

crime rates, in the Canadian context there is only suggestive

TABLE I
Data description
Variable

Symbol for

Logarithmic Form
Description Sources
Property Crime Rate
pcr Provincial rate of property crime, incidents per
100,000 residents as of July 1.
a
CANSIM Tables 252-0001 (1962-1997);

252-0051 (1998-2015); 051-0026 (1962-

1970),- 0001 (1971-2015)

Per Capita Income
y Real provincial household disposable income
per capita.

CANSIM Tables 384-5000 (1962-2013);

384-0040 and 051-0051 (2014-2015)
b
Unemployment Rate
ur The provincial unemployment rate. CANSIM I CHASS I CHASS Labels
D45076,45097,45118, 45139, 45160

(1967-1975)

CANSIM Table 282-0002 (1976-2015)

Per Capita Alcohol

Sales

alcohol_sales
Real value of provincial alcohol sales per capita,
by March 31 fiscal year end
c
CANSIM Tables 183-0006; 183-0023

(2014-2015 - see Note 3); 051-0026

(1962-1970), 051-0001 (1971-2015)

Youth Population

Share

youth_share
The provincial ratio of the population aged 15 to
24 as of July 1 that year divided by the

population as of July 1 of that year.

CANSIM Tables 051-0026 (1962-1970),

051-0001 (1971-2015)

Migration Turnover

Rate

mig_turnover
Migration Turnover Rate: The provincial ratio of the
number of international immigrants plus emigrants

plus interprovincial in-migrants plus interprovincial

out-migrants that year divided by the

population as of July 1.

CANSIM Tables 051-0017 and 051-0037

(1962-2015); 051-0026 (1962-1970),

-0001 (1971-2015)

a
Police-reported crime data are available starting in 1962, using the Uniform Crime Reporting Survey UCR1 definitions and crime categories. These data are
made available by Statistics Canada from 1962 to 2003. Statistics Canada currently releases police-reported crime data under UCR2 coding. Changes

from the UCR1 coding include more detailed offense categories, expanding from the three-digit coding in UCR1 to the four-digit coding in UCR2. Many

offenses which were previously categorized in the “Other Criminal Code violations” category were re-categorized under UCR2 as violent or property

crimes. The UCR2 data go back to 1998 and are considered as the official crime statistics. Statistics Canada has also released more comprehensive

data using UCR1 methodology for the period from 1977 to 1997, with series similar to those released after 1997. For the purpose of this article, the

UCR1 data was used from 1962 to 1997, and the UCR2 data was used from 1998 to 2014. The change in methodology at 1998, with a substantial

jump in many police-reported crime rates in 1998 compared to 1997, is important to note and to treat appropriately in the econometric analysis.

b
The two different data sources resulted in series discontinuities in 2014. Since the data for the 2014-15 period included earlier data, the series in first
differences was spliced starting in 2014 rather than the series in levels.

c
Data is for fiscal years ending on March 31 of the given year. Since the data contain nine months of data from the previous year, regressions were
conducted using the lead (
t+1) which would contain nine months of data from that calendar year along with data from three additional months from the
following year, but did not yield statistically significant coefficients for these leads.
Assessing the impact of economic and demographic change on property crime rates in Western Canada_3

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