Crime and Inflation Rates in the Philippines:A Co-integration Analysis

Full Text	Pdf
Author	Adrian M. Tamayo, Carmelita Chavez, Nestor Nabe
ISSN	2307-2466
On Pages	380-385
Volume No.	2
Issue No.	5
Issue Date	August 01, 2020
Publishing Date	August 01, 2020
Keywords	crime volume, infloation rate, development policies, co-integration

Abstract

The test of relationships of variables has been used to provide policy tool a foundation for forecast interactions. If variables were empirically determined to have close association, then a control of one variable then it will show significant effect on the other variable, thus a forecast relationship. This study aimed to establish long-run relationship between crime volume and the inflation rates. This will address the chicken-egg question, poverty leading to crime, or crime causes poverty? Or statistically, will crime rates lead to increased prices or high prices cause crime from period 2003 to 2007? The test of unit root was conducted to establish stationarity of the time-data, then a Granger-causality test for cointegration was conducted. �Data were found to be stationary when integrated at order 2, I(2) as the for both series , the cointegration was conducted at Mixed Process of the Augmented Dickey Fuller (ADF) test of unit root with a computed value of -4.25 with an R2=0.5237 and Durbin � Watson (DW) was 1.214. Also, findings revealed that the highest crime rate was recorded at the period the inflation rates was at the highest. Crime rates and increasing prices are cointegrated. This finding would lend support to peace and development policies. The paradigm of peace first before development or the reverse would not make any difference; it is on what the government is good at must be the first. Either peace and security first, development follows; development first, peace follows.

Back