Crime and Unemployment in Scotland: An Econometric Analysis Using Regional Data.

This paper attempts to examine the perennial question of the relationship between unemployment and crime using regional data for Scotland over the period 1974 to 1988. The econometric problems posed by autocorrelation, heteroscedasticity, and cross-sectional correlation are addressed within a feasible generalized least squares framework. A fixed effects and a random effects model are also estimated. A well-determined positive relationship between the regional unemployment rate and the crime rate is detected, which is invariant to the estimator used. Copyright 1992 by Scottish Economic Society.