Economic adversity and crime: old theories and new evidence.

Weatherburn, Don ; Schnepel, Kevin T.

Introduction

Despite the salience of crime as a social issue, only eight articles about crime have been published by the Australian Journal of Social Issues (AJSI) in the past ten years. While crime rates have declined since the early 2000s in Australia, public concern about crime remains strong (Snowball & Jones 2006). Scholarly interest in crime control has also increased among academics internationally, especially within the fields of sociology, criminology, psychology and economics. In recent years there has been a resurgence of interest in the relationship between socio-economic disadvantages and crime. In this article, we review some of the classic theories and recent evidence in this area with the intention of encouraging more research in Australia that addresses the effects of work, education, housing stability, and financial security--all of which are heavily influenced by economic and social policy--on crime prevention and control.

A strong correlation between measures of local socio-economic disadvantage and rates of criminal activity inspired early criminologists to develop theoretical explanations that focus on disadvantage as a key determinant of criminal behaviour. Figures 1 and 2 below illustrate the relationship with data drawn from New South Wales. The first figure plots the level of socio-economic disadvantage--as measured by the Socio-Economic Indexes for Areas (SEIFA) in each Local Government Area (LGA) of NSW (ABS 2011)--against the log of the recorded violent crime rate for that LGA. The second figure plots the level of disadvantage against the log of the recorded property crime rate. (2) The relationship between crime and disadvantage is clearly very strong for both categories of offence, as indicated by the correlation coefficients (r). Similar patterns have been noted in other countries over a long period of time. (3)

However, perhaps due to the difficulty of isolating a causal relationship empirically, and to an increased emphasis on theories of criminal behaviour originating from the developmental psychology discipline, attention among criminologists towards these socio-economic explanations has waned over the past thirty years. Despite this paradigm shift, the emergence of detailed data that track criminal behaviour and socio-economic factors within narrowly defined neighbourhoods, along with studies designed to estimate causal effects, has led to a burst of empirical research documenting a robust relationship between socio-economic disadvantage and criminal behaviour. We primarily focus our review on the relationship between economic adversity and crime. Increasing economic adversity can be characterised by rising unemployment, declines in stable job opportunities, falling wages and household income, as well as many other factors such as the lack of stable housing and changes in social welfare program participation.

We believe that renewed focus on economic adversity within criminology is likely as researchers discuss and analyse increasing economic inequality and the consequences of this trend with regard to social issues such as crime. There also exists growing concern about the intergenerational transmission of inequality and the degree to which parental economic disadvantage can have permanent effects on the health and human capital of future generations. It is likely that economic adversity not only impacts current criminal activity but also that of future generations.

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In Section 2 of the paper we discuss early theories within criminology, sociology, and economics that posit a direct relationship between economic adversity and crime. Then, in Section 3, we acknowledge a transition away from these classic theories due to lack of sufficient evidence supporting theoretical predictions up until the 1990s. Sections 4 and 5 discuss two theories indirectly linking economic adversity and crime: the effect of adversity on parenting and child development; and the influence of informal social control. In Section 6, we describe new evidence supporting the classic theories of a direct connection between economic adversity and crime. Finally, in Section 7, we propose suggestions for future research.

Classic theoretical perspectives, 1950-1970

There is no generally accepted term for theories that attribute crime to socio-economic disadvantage. For want of a better description, we place such theories under the umbrella term classical paradigm.

Cohen (1955) was one of the first to try and explain the connection between economic adversity and crime. He argued that lower-class socialisation equips lower-class boys less adequately than their middle-class counterparts for success in school. The result, according to Cohen, is a sense of personal failure reinforced by stigmatisation at the hands of teachers and more successful students. Cloward and Ohlin (1960) reached the same conclusion, but argued that delinquency emerges as an act of rebellion against blocked social opportunities rather than as a result of inadequate socialisation. According to Cloward and Ohlin, structural blockages of social opportunity have the effect of driving youths into gangs as a way to gain social status that is unobtainable for them in conventional society.

Strain theory represents a third approach to the problem. Merton (1968) argued that all societies define certain material goals as 'worth striving for' and specify certain norms that define the legitimate means available to achieve these goals. Those who suffer socio-economic disadvantage are said to experience a disjunction between their socially inculcated aspirations and the legitimate means available to achieve them. In other words, they share the same desire as everyone else for wealth and social status, but their position in society limits the scope for achieving these goals through institutionalised or legal systems. According to strain theory, this disjunction or conflict increases the likelihood of an individual to participate in crime.

Sociology was not the only discipline in the 1960s to claim a link between disadvantage and crime. The influential economist Gary Becker (1968) proposed a theory of offending according to which individuals allocate their time between legitimate and illegitimate activities in proportions that maximise total expected utility. The expected utility of crime in his theory is determined by the perceived risks, costs and benefits associated with it. The costs of crime include opportunity costs, that is, benefits foregone as a result of involvement in crime. Becker argued that the opportunity costs of involvement in crime rise with increases in income and education. His theory thus implies a strong positive relationship between disadvantage and crime.

A 'consensus of doubt', 1970-1990

The belief that crime had its origins in social and economic inequality dominated criminological thinking throughout the 1960s. By the late 1970s, however, confidence in these theories had begun to fade. The first seeds of doubt were sown when researchers using self-reported surveys found no evidence of a relationship between economic adversity and crime (Hirschi 1969). This led some to question the supposed relationship between socio-economic status and crime (Tittle, Villemez & Smith 1978). (4)

Another notable factor was the failure of the United States War on Poverty to reduce crime (Wilson 1987). The War on Poverty pursued by Presidents Kennedy and Johnson included civil rights reform and expanded eligibility for income transfer programs; increased aid to families with dependent children; and the introduction of new or expanded programs such as Medicaid and food stamps, compensatory job training and compensatory schooling. American expenditure on such programs nearly doubled between 1950 and 1980 (Wilson 1987). None of this resulted in a reduction in crime. On the contrary, between 1960 and 1975, the United States experienced substantial increases in robbery (+264 per cent), aggravated assault (+164 per cent), rape (+174 per cent), homicide (+188 per cent) and burglary (+200 per cent) (Cohen & Felson 1979).

By the end of the 1980s cross-sectional studies gave way to time-series studies and it became clear that, although crime rates are uniformly higher in areas of high unemployment, crime rates are not consistently higher during periods of high unemployment (Chiricos 1989). Indeed, crime rates were sometimes found to be higher during periods of low unemployment. Although most of the research in this area focused on the United States, the findings were replicated in other countries. Weatherburn, Lind and Ku (2001), for example, examined the relationship between unemployment and crime in Australia between January 1989 and December 1995, a period that overlapped with a recession widely believed to be the worst in Australia since the Great Depression. They too found no relationship between unemployment and crime.

The advent of large-scale longitudinal birth cohort studies dealt yet another blow to classical theory. In 1986, the US Panel on Research on Criminal Careers published a highly influential report that raised doubts about the value of cross-sectional research and argued that longitudinal studies were much better geared towards determining the causes of offending behaviour (Blumstein, Cohen, Roth & Visher 1986). This declaration placed a question mark over studies linking crime to poverty, unemployment or economic inequality since most of them employed cross-sectional designs. Meanwhile, longitudinal studies were beginning to emerge highlighting the importance of family factors (for example, poor parental supervision; lack of parent--child involvement; erratic, harsh and inconsistent discipline) as causes of involvement in crime (Loeber & Stouthamer-Loeber 1986).

Cantor & Land (1985) and Land and colleagues (1995) endeavoured to resolve these results by arguing that unemployment has competing effects on offender motivation and criminal opportunity. According to their theory, high unemployment leads to more motivated offenders but fewer unguarded houses during the day and fewer people going out at night. These two effects, it was argued, tend to cancel each other out. Cantor and Land's methods came under considerable criticism (Greenberg 2001; Paternoster & Bushway 2001). As a result, their theory did little to remove what Chiricos (1989) termed the 'consensus of doubt' surrounding the relationship between unemployment and crime. By the end of the 1980s, some influential theorists (for example, Wilson & Herrnstein 1985; Gottfredson & Hirschi 1990) were openly dismissive of the idea that rates of participation in crime were influenced by factors such as income, poverty and unemployment.

Economic adversity and parenting quality

These developments signalled a marked shift in criminological interest from the economic and social to the individual and family factors in the genesis of offending. During the 1990s, the number of published longitudinal studies grew rapidly, so much so that by 2002 it became possible to speak of a developmental paradigm in criminology (Farrington 2003). The key features of this paradigm were an overarching concern with the way in which different factors at different stages of an individual's life course affect an individual's 'offending trajectory.' Particular emphasis was placed on distinguishing the role of psychological--particularly family--factors from macro-social factors in the genesis and maintenance of offending.

Ironically, as criminologists were losing interest in the influence of economic and social factors on human behaviour, researchers in the field of child welfare were becoming increasingly interested in the way economic and social factors influenced the quality of parenting that children received (Belsky 1993).

Lempers, Clark-Lempers and Simons (1989), for instance, examined the effects of a rural economic recession in a mid-western rural community in the United States. The subjects in the study were 622 students enrolled in schools throughout the community. To measure economic stress, students were interviewed about recent income-related changes in their family's lifestyle. Measures of parental nurturance and consistency in administering discipline were obtained through a questionnaire dealing with changes in parental behaviour during the previous six months, as perceived by the students. Lempers and colleagues (1989) found a strong negative association between the perceived level of financial hardship experienced by the family over the last six months and the perceived level of parental nurturance. They also found a strong relationship between the perceived level of financial hardship and the use of inconsistent discipline by the parents.

Harris and Marmer (1996) examined the impact of economic stress on the emotional and behavioural involvement of parents with their adolescent children using data from the National Survey of Children (NSC), a panel study of a nationally representative sample of children interviewed in three waves: 1976, 1981 and 1987. They found a strong effect of chronic economic stress (whether measured by household income or welfare receipt) on the level of emotional and behavioural involvement between fathers and their adolescent children. They also found that mothers on welfare were less likely to be behaviourally involved with their children. Both of these effects were obtained in the presence of controls for race, gender, age, parental education and maternal education.

These findings and others like them (for example, Elder, Van Nguyen & Caspi 1985; McLoyd & Wilson 1990; Silbereisen, Walper & Albrecht 1990) suggested that economic adversity might influence juvenile involvement in crime by disrupting the parenting process. A theory along these lines is discussed in Delinquent-Prone Communities (Weatherburn & Lind 2001). The argument in the book was that parents who experience higher levels of economic or social stress are more likely to neglect or abuse their children or engage in disciplinary practices that are considered harsh, erratic or inconsistent. This pattern of parenting behaviour increases the likelihood that children will gravitate towards or affiliate more strongly with their peers. To the extent that these peers are involved in crime, this association increases the likelihood that susceptible juveniles will become involved in crime.

To test this theory, Weatherburn and Lind (2001) analysed the links between poverty, parenting and delinquency across 262 postcodes in urban Sydney. They began by regressing measures of juvenile participation in crime against various measures of economic and social disadvantage (for example, poverty, family dissolution, crowded households). As expected, these factors explained a great deal (62 per cent) of the spatial variation in rates of juvenile participation in crime. When they included a measure of the recorded rate of substantiated child neglect and abuse in each postcode, however, the coefficients on variables measuring economic and social disadvantage fell substantially. The coefficient on the poverty measure, for example, fell from 0.71 to 0.19. Similar findings using longitudinal data were obtained in New Zealand by Fergusson and colleagues (2004).

Sampson and Laub (1994) employed a measure of family poverty based on average weekly earnings and the family's reliance on outside aid. Rather than just confine themselves to the question of whether economic stress exerted its influence on delinquency through parenting practices, Sampson and Laub constructed indices of social stress, including family size, family disruption, maternal employment and foreign-born status. This enabled them to see whether the effects of social and economic stress and delinquency were mediated through parenting practices. As expected, economic and social factors ceased to have any effect once controls were introduced for the degree of erratic/harsh discipline and the level of parental supervision. Sampson and Laub (1994) concluded that poverty and social stress both influence delinquency by reducing the capacity of families to achieve effective informal social control within the household. Informal social control has also been explored as a potential explanation for crime at the neighbourhood level, as discussed in the following section.

Economic adversity and social disorganisation

More than 40 years ago, Shaw and McKay (1969) propounded social disorganization theory, which asserts that poverty, family dissolution, ethnic heterogeneity and geographic mobility (population turnover) produce a breakdown in informal social controls, defined as: 'the conventional traditions, neighbourhood institutions, public opinion, through which neighbourhoods usually effect a control over the behaviour of the child' (Shaw, cited in Void, Bernard & Snipes 2002:123).

Social disorganisation theory received its share of criticism, including suggestions that Shaw and McKay committed the ecological fallacy in making inferences about individuals based on aggregate data (Void & Bernard 1986: 177); that delinquent neighbourhoods often show clear evidence of strong social organisation both among law-abiding and law-breaking citizens (Whyte 1943, cited in Reiss 1986); and that Shaw and McKay did not always clearly differentiate the presumed outcome of social disorganisation--that is, increased rates of crime--from disorganisation itself (Lander 1954, cited in Bursik 1986). However, the theory mainly lost popularity because a major community crime prevention program associated with it was found to exert a negligible impact on crime (Void, Bernard & Snipes 2002).

In the late 1980s and 1990s, Rob Sampson and his colleagues revitalised social disorganisation theory in ways that capitalised on the notion of guardianship inherent in routine activity theory (for example, Sampson & Groves 1989; Sampson & Lauritsen 1990; Sampson & Laub 1993; Sampson, Raudenbush & Earls 1997). Like Shaw and McKay (1969), they argued that poverty, geographic mobility, family dissolution and/or their ethnic heterogeneity weakened the capacity of a community to protect itself against crime. Sampson and colleagues maintained that these factors weakened a community's 'informal social controls', that is:

the capacity of a group to regulate its members according to desired principles--to realise collective, as opposed to forced, goals.... Examples of informal social control include the monitoring of spontaneous play groups among children, a willingness to intervene to prevent acts such as truancy and street-corner 'hanging' by teenage peer groups, and the confrontation of persons who are exploiting or disturbing public space. (Sampson et al. 1997: 918).

If collective efficacy mediates the effects of poverty, ethnic heterogeneity, family dissolution and geographic mobility on crime, the influence of these factors should diminish or disappear when controls are introduced for the level of collective efficacy in a community.

Sampson and colleagues (1997) set out to test this hypothesis using special measures of collective efficacy based on how well neighbours knew and supported each other, how willing they were to intervene when faced with a local threat to law and order, and/or how much they participated in voluntary or civic associations. They found a strong inverse correlation between the spatial distribution of collective efficacy and the spatial distribution of crime.

As expected, when collective efficacy was included in a regression equation linking crime to poverty, ethnic heterogeneity, family dissolution and geographic mobility, the influence of these factors weakened or disappeared.

A resurgence of interest, 2000-2015

In recent years there has been renewed interest in the possibility of direct links between economic adversity and crime. The resurgence of interest has been sparked by a growing realisation that there is an endogenous relationship between various measures of economic adversity and crime rates. To take just two examples, increasing crime rates can directly affect local labour market conditions as employers flee crime-ridden neighbourhoods. Having an arrest or imprisonment record has also been found to affect employment and earnings outcomes (Holzer 2009; Borland & Hunter 2000).

Researchers have been addressing these issues using several different strategies including: the use of more geographic- and temporal-specific measures of economic adversity; the use of innovative econometric techniques such as instrumental variable models; the implementation of randomised controlled trials; and the use of 'natural experiments' to isolate the direct effect of economic adversity on crime.

Two recent articles summarise the economics and criminology literature analysing the relationship between labour markets and crime and highlight important challenges in obtaining an unbiased estimate from standard OLS regressions (Bushway 2011; Mustard 2010). Mustard (2010) discusses the increased use of panel data estimation techniques to control for unobserved determinants of criminal behaviour that are correlated with measures of economic adversity. (5) Research estimating the relationship between local unemployment rates and crime using these panel data techniques obtain more robust estimates than previous cross-sectional or time-series analyses (Raphael & Winter-Ebmer 2001; Gould et al. 2002; Machin & Meghir 2004; Levitt 2004; Oster & Agell 2007; Lin 2008).

Prior studies also investigate the relationship between business cycles and crime rates. Cook and Zarkin (1985) compared changes in the growth rate of certain criminal offences during periods of economic growth with changes in the growth rate of these offences during periods of economic contraction over nine complete US business cycles between 1933 and 1981. They found consistently higher rates of growth in robbery and burglary during periods of economic contraction than during periods of economic growth. Arvantes and Defina (2006) confirmed these results for a wider range of property offences. Using cycles of consumer sentiment rather than gross state product to measure economic adversity, Rosenfeld and Fornango (2007) estimated a strong negative relationship between the consumer sentiment index and four categories of acquisitive crime (robbery, burglary, larceny, and motor vehicle theft). (6)

While a growing amount of empirical evidence confirms a robust relationship between aggregate economic conditions and crime, the components of economic adversity just referred to may not be the ideal variables for determining whether economic hardship influences crime. Unemployment rates are a lagging indicator of economic adversity and may also not accurately measure economic adversity relevant to those individuals most at risk of engaging in crime. Researchers have assessed the impact of other indicators of economic adversity related to labour markets, such as fluctuations in low-skill wages, household income, or job opportunities for released prisoners.

One of the earliest studies in this vein was Grogger's (1995) analysis of the relationship between youth wages and self-reported involvement in crime. He found a strong negative relationship between youth wages and self-reported youth participation in income-generating property crime, even after adjusting for the effects of age, race, education, marital status and several other key variables. He went on to show that on this basis he could explain much of the disparity in crime rates between African Americans and whites, as well as much of the decline in rates of participation in crime with age. Other empirical work finds the influence of low-skill wages on crime greater than that of local unemployment rates (Doyle et al. 1999; Gould et al. 2002; Machin & Meghir 2004). Mocan and Unel (2011) estimate a large change in criminal activity associated with changes in low-skill earnings using both aggregate panel data and longitudinal individual-level data. Household income also seems to bear a strong inverse relationship with crime in NSW Local Government Areas between 1996 and 2008 (Wan et al. 2012).

Recent research also finds that certain types of job opportunities at the time of prison release can have an important influence on the rate at which former offenders return to prison (Schnepel 2014). Such research helps to explain why prior studies have found that the average criminal is unresponsive to work incentives. While evaluations of large-scale reentry programs--in which minimum-wage jobs are randomly assigned to released offenders--find mixed results as to whether these employment opportunities can reduce recidivism (Redcross et al. 2011; Jacobs 2012), Schnepel (2014) finds that job opportunities within the construction and manufacturing sectors can reduce crime among released offenders in California. Compared with other low-skill employment opportunities such as retail and food services, construction and manufacturing jobs are associated with much higher wages. Two recent papers in the criminology literature find that differences in manufacturing job opportunities for released offenders can partially explain racial differences in recidivism rates (Wang et al. 2010; Bellair & Kowalski 2011). This set of results confirms that low-skill wages are important determinants of crime while also suggesting that a significant component of economic adversity may be the type of work available to potential criminals.

Finally, mounting evidence suggests that other components of economic adversity affect crime. For example, two very important programs for individuals experiencing economic adversity are public housing assistance and welfare programs. Freedman and Owens (2011) find a significant reduction in violent crime rates associated with a program increasing the availability of affordable housing. Social safety net programs designed to assist households during times of economic adversity in the United States have also been consistently associated with lower crime rates (Monte & Lewis 2011; Fishback et al. 2010; Hannon & DeFronzo 1998; Zhang 1997). The timing of payment in income support programs has also been found to affect criminal behaviour. Foley (2011) found that spreading cash welfare payments out over the course of the month prevented criminal activity since some individuals receiving one monthly payment spend the provided support quickly and then resort to criminal income prior to the next payment.

In sum, we now have a great deal of empirical evidence indicating that various components of economic adversity are important determinants of criminal behaviour. As empirical methodologies continue to advance and detailed administrative data becomes available to researchers, we expect the evidence supporting a connection between economic adversity and crime to continue to grow.

Conclusions and direction for future research

While we do not provide a comprehensive review of research addressing the relationship between economic adversity and crime, the available evidence strongly suggests economic adversity increases the level of involvement in crime. It would be imprudent for any policy maker to ignore this. That said, much work is still required before we can claim a thorough understanding of the relationship between disadvantage and crime.

Aggregate-level studies are useful, but if the claim is that economic adversity affects the behaviour of individuals, it makes sense to complement aggregate-level studies with research that examines the behaviour of individuals (Levitt 2001). The importance of this was highlighted in a study conducted by Farrington and colleagues (1986). Using data from a prospective longitudinal study of 411 London males, he and his colleagues found higher self-reported and officially recorded acquisitive crime during periods of unemployment than during periods of employment. These effects, however, were concentrated among young people who exhibited other developmental risk factors for offending.

This is an important finding because it suggests that unemployment may have effects in areas where rates of juvenile involvement in crime are already high or where attachment to the labour market is weak. Even so, the Farrington (1986) study is now nearly 30 years old and the young people on which the study was based would all now be over the age of 60. Furthermore, it is not safe to assume that what was true of working class London boys in the 1960s is true of young people in Australia in 2014. The study could be replicated and extended--to cover wages as well as employment--if the Australian HILDA survey (Summerfield et al. 2011)--which contains a wealth of information on income and employment--were modified to include questions on self-reported involvement in crime.

Another potentially valuable line of research would be to examine the impact of economic adversity on rates of recidivism. As previously discussed, Schnepel (2014) finds evidence that good job opportunities for released offenders prevent crime among a population with an extremely high rate of offending. No similar studies have yet been carried out in Australia. Economic and social policy that helps to reduce offending among individuals with criminal records can yield large returns in terms of crime prevention and reduction. It can also yield large reductions in rates of imprisonment (Weatherburn et al. 2009). This is particularly important given the chronically high levels of Indigenous over-representation in prison and the complete failure of past policies to reduce it (Weatherburn 2014).

An important area for future research on the relationship between social policy and crime concerns the effect of changes in the level of income support for groups thought to be more susceptible to or responsible for criminal activity. Four obvious groups to focus on are Indigenous Australians, sole parents, young unemployed persons, and young people with an intellectual disability. The first group is important because, as just noted, they are massively over-represented in prison. The second group is important because, as we have seen, their parenting behaviour plays a critical role in shaping the likelihood of juvenile involvement in crime. The last two groups are important because both are over-represented in the prison system and, for that reason, may be more likely to respond to a decline in income support by spending more time involved in crime.

One of the most pressing problems is that most of the evidence to date claiming that the effects of economic adversity are transmitted through deterioration in the quality of parenting or through a breakdown in informal social controls is derived from cross-sectional surveys. These studies have inherent and well-known limitations when it comes to causal inference. We need longitudinal--for example, panel--studies that track changes in economic stress, parenting quality, informal social control and crime over long periods of time. With the notable exception of Schuerman and Kobrin (1986), very few studies have done this. That would make it much easier to determine whether changes in economic adversity exert indirect effects on crime and, if so, what these indirect effects are.

While most of the recent empirical evidence discussed in the previous section (A resurgence of interest) measures contemporaneous relationships between economic adversity and crime, a few very recent studies find that economic adversity experienced early on in life can have long-term effects on adult criminality. Bell and colleagues (2014) estimate higher rates of lifetime crime and incarceration among those leaving high school during recessions in both the United States and the United Kingdom. Leaving high school during a recession is associated with a 5.5 per cent increase in the probability of incarceration over the next two decades in the US and a 5.7 per cent increase in the probability of a future arrest in the UK. Using data from a public school choice lottery in North Carolina, Deming (2011) finds a substantial long-term impact on adult criminal behaviour associated with school quality. Damm and Dustman (2014) find that refugee immigrants to Denmark assigned to live in high-crime areas were much more likely to be convicted later in life than immigrants exogenously assigned to areas with fewer criminals. Other research documents a striking relationship between early life exposure to lead (Pb)--a dangerous environmental toxin abundant in old and dilapidated homes due to layers of lead-based paint--and criminality (Reyes 2014).

Each of these studies illustrates the importance of addressing problems of economic adversity throughout the life span of at-risk individuals. These long-term effects undoubtedly contribute to the intergenerational transmission of disadvantage and inequality. Additional research estimating both the short-and long-term influence of economic adversity is needed to inform policymakers of the full spectrum of costs and benefits associated with economic and social policies that affect crime.

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Don Weatherburn [1] and Kevin T. Schnepel

Endnotes

(1) Corresponding author. Email address: don_j_weatherburn@agd.nsw.gov.au Ph. (02) 9231-9190.

(2) LGAs with a population of less than 3,000 have been removed from the analysis to reduce some of the noise. Note that higher levels of the SEIFA scale indicate lower levels of disadvantage.

(3) See for example, Pratt 6c Cullen (2005), Belknap (1989), Box (1987), and Chiricos (1987).

(4) This problem was resolved when it was realised that most self-reported offending is only relatively minor in nature (Hindelang, Hirschi 6c Weis 1979) and that self-report studies examining serious forms of offending do find strong association between economic stress and crime (Elliott & Huizinga 1983).

(5) The inclusion of 'fixed effects' for specific geographic areas--such as states or cities allows estimation of effects based on variation within these specific areas controlling for all unobserved influences specific to the area which are constant over time. Panel data also allow researchers to control for time-specific effects and area-specific time trends.

(6) Similar results in relation to consumer sentiment were obtained in Australia by Moffatt and colleagues (2005).