Economic Inequality and Homicide in the Developed Nations From 1975 to 1995

Abstract

This study tests the Blau and Blau theory about the relationship between economic inequality and homicide rates. This literature has largely ignored cumulative effects and the time it takes for long-term relationships to be completed. Cross-sectional studies also have difficulty correcting for omitted variable bias, but fixed-effects panel designs can better overcome problems with dynamic relationships and omitted variables. Using moving averages to capture long-term cumulative relationships, this study uses a fixed-effects pooled time-series design to analyze the relationship between inequality and homicide rates in 14 developed democracies. The findings support Blau and Blau as they suggest that homicide rates are higher in the most unequal societies, but the nonlinear relationship the authors detect provides additional support for relative deprivation theory. Elasticities show that economic inequality and the presence of young males have strong relationships with the murder rates. These results have policy implications that are explored as well.