Re-Visiting the Crime-and-Poverty Paradigm: An Empirical Assessment with Alternative Perspectives

The common sense notion of the crime-and-poverty synergy is widely used by many people. It influences policy directions and some researchers have used empirical works on the matter without testing its premise. The current study uses national data from Jamaica on 1) inflation, 2) unemployment, 3) poverty, 4) gross domestic product per capita growth, and the 5) exchange rate to test the crime-and-poverty phenomenon, and establish models that can be used to explain violent crimes. Data from 1989 to 2009 were used to carry out this secondary data analysis. Poverty is not a causal factor of violent crimes in Jamaica, and the positive correlation between poverty and violent crimes is a spurious one. Of the five macroeconomic variables that were entered into the model, two emerged as statistically significant which explained violent crimes (F statistic = 10.1, Probability (F-statistic) <0.00001). The two factors of violent crimes are GDP per capita growth (p = 0.003) and annual exchange rate (p = 0.011). Eighty per cent of the variance in violent crimes is explained by changes in GDP and exchange rate. (R2 = 0.795) Even though 80% of variability in violent murders can be explained by annual exchange rate and annual GDP per capita growth rate, evidence shows that there are omitted variables (F>Ftable), but this study still provides a good understanding of the new paradigm. There is a need for social, political and economic transformation of the Jamaican society to benefit all.