Income inequality and violent crime: evidence from Indian states

The objective of this study is to examine the determinants of different types of violent crime in India. A panel data model was estimated using data from 28 Indian states and one union territory during the years 1993, 2004 and 2011, covering three decades. Based on the Hausman test result, random effect model was used for all types of violent crime except robbery. Our main result suggests that income inequality measured using Gini coefficient negatively affects the incidence of murder, attempt to commit murder, and kidnapping and abduction. Furthermore, there are evidences suggesting that unemployment is an insignificant variable in explaining the incidence of different categories of violent crime. Consistent with previous research, lower levels of violent crimes are associated with a higher literacy rate. The current study also discusses the possible reasons for the above mentioned relationship between economic variables and violent crime.