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How income and income inequality affect various crime rates?

Tools used in this project
How income and income inequality affect various crime rates?

About this project

My main goal was to find out how an implementation of an universal basic income would affect crime rates in Alaska via the Alaska Permanent Fund. I did this by collecting 6 raw-real world datasets with over 1.3M observations, creating variables for income(average income), income inequality(Gini coefficient) and controls from scratch and then performing linear regressions. If I had access to Stata, I would perform all regressions there but I do not so I just ran a linear regression in Python.

Key insights:-

  1. DC is a complete and total outlier because the crime rate(both property and violent) is so high that it significantly skews and subsequently biases the data.
  2. We have continuously got statistically significant results at the 5% level such that, in general, violent and property increases when there is more income. This makes sense for property crime intuitively as more income means more wealth to steal but not violent crime as you would think more income would mean more investment in the police force which would mean fewer criminals get away with their crimes.
  3. Violent crime goes up with more income inequality(as measured by the Gini coefficient) but property crime goes down. These findings are statistically significant also till the 5% level and for property crime at the 0.1% level.
  4. The only feasible explanation for why this is happening with violent crime is that when income and income inequality increase simultaneously people tend to become violent as an increase in income would mean a better prepared police force(as long as funds are distributed appropriately).
  5. An implementation of an universal basic income decreased violent crime by 0.0058 and property crime by 0.1767 incidents for every $1 increase in income.
  6. Similarly, violent crime went down by 4.4128 and property crime by 34.1578 incidents for every 1 point increase in the Gini coefficient after the implementation of the universal basic income.

Raw code here:- https://github.com/anishmitra9666/Alaskapermanentfund

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