Evaluating the effect of economic fluctuations on Japanese parolees' re-incarceration using cointegration regression and error correction models

Abstract

Based on Cantor and Land (1985)' s theory, I tested the criminal-motivation-effect hypothesis (bad economic conditions increase crime rates with a one-year time-lag) and the criminal-opportunity-effect hypothesis (good economic conditions increase crime rates in the same year). I used Japanese time-series data (1959-2005) of male parolees're-incarceration rates (as an indicator of crime rates) and annual average compensation rates (as an indicator of economic conditions). Based on Greenberg (2001), I used statistical models with cointegrating regression and error correction models. I found that the criminal-motivation-effect was significant as predicted. However, the trend was opposite to the prediction of the criminal-opportunity-effect hypothesis.