This paper develops a model of crime analyzing how such behavior is associated with individual and neighborhood poverty. The model shows that even under relatively minimal assumptions, a connection between individual poverty and both property and violent crimes will arise, and moreover, neighborhood effects can develop, but will differ substantially in nature across crime types. A key implication is that greater economic segregation in a city should have no effect or a negative effect on property crime, but a positive effect on violent crime. Using IV methods, I show this implication to be consistent with the empirical evidence.
Poverty crime neighborhood effects segregation instrumental variables public housing