Inflation, Deterrence and Crime: Evidence from Nigeria using Bounds Test Approach

Abstract

This study examines the link between inflation and crime with an alternative way of reducing crime in Nigeria. The alternative to crime decrease tool apart from traditional deterrence measures is domestic investment. Besides, explanation on how inflation has affected crime in Nigeria rest on the strain and rational choice theory. Also, data set from 1970 to 2013 estimated by using the autoregressive distributed lag model. The results showed that inflation affects crime and other property crimes of armed robbery, false pretence/ cheating and arson at the 5% level of significance. In addition, domestic investment reduces crime statistically at 1% when compared with the prosecution that weakly reduces crime significantly at 10%. Punishment found weak to reduce crime in the long-run significantly. Based, on the results, this study suggests that inflation should be check and controlled, the crime deterrence institutions should be strengthen and domestic investment improved on to reduce crime in Nigeria.

Keywords: Inflation, crime, strain, deterrence, autoregressive distributed model.