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Impact of Economic Conditions on Robbery and Property Crime: The Role of Consumer Sentiment

NCJ Number
Date Published
November 2007
36 pages
Robert Fornango, Richard Rosenfeld
This study examined the relationship between the Index of Consumer Sentiment (ICS), a summary indicator, and regional robbery, burglary, larceny, and motor vehicle theft rates in the United States between 1970 and 2003.
The results conclude that collective economic perceptions and attitudes influence robbery and property crime rates; changing consumer attitudes help to explain temporal variation in crime rates, which included the dramatic decline during the 1990s. Approximately one third of the drop in robbery and burglary rates, one half of the drop in larceny, and one quarter of the decline in motor vehicle theft during the 1990s were able to be attributed to improving consumer sentiment, although the estimates were the midpoints of broad confidence intervals, indicating that the true effects could be appreciably smaller or larger. Additionally, the 1970 through 2003 model estimates for consumer sentiment, Gross Domestic Product (GDP), and imprisonment yielded accurate predictions for 2004 robbery and property crime rates, and 2005 burglary and larceny rates, but much less accurate predictions for the 2005 rates of robbery and motor vehicle theft. Consumer sentiment had significant negative effects on robbery and property crime rates in 1970 through 2003 region-level panel models, incorporating controls for other crime determinants, including unemployment and real GDP per capita. The effect of consumer sentiment on robbery rates remains significant in models that contain both measures, and might interpret some of the GDP effect, which is a finding consistent with crime theories that imply perceived economic conditions are as important, or more important, than objective circumstances in their effect on crime rates. The data were collected from the Federal Bureau of Investigation’s Unified Crime Report and compared with the University of Michigan’s ICS. Tables, figures, references, and appendix
Date Created: October 31, 2007