Temporal Causality and the Dynamics of Crime and Delinquency

This paper is the first attempt to identify crime-delinquency relationship at the national level. We apply various techniques to identify the dynamic relationship between crime and delinquency rates in USA from 1987 to 2008. Two types of crime rates are observed, violent and property crime rate. The study finds strong short-term evidence that delinquency causes an increase in property crime rate for the years 1987 through 1995 and again 1996 through 2000, but no evidence for a long-term relationship in the full sample 1987 through 2008. The reverse effect of crime on delinquency rate is mostly insignificant. The property values work as a linkage between crime-delinquency relationship in the short-term data. One important finding of this study is the apparent exogeneity of the crime rate with respect to delinquency rate during the economic downturn. We also control for 30-year fixed-rate mortgages, housing starts, and median weekly wage.