Crime Reporting and Income Inequality: Cross-Sectional Evidence

Committed crimes not only cause harm but also disrupt the fabric of society, thus it is essential for the victims to be compensated for the damages inflicted. However, this can only be achieved if the crimes are reported, a crucial step that is unfortunately not always taken by victims. Reporting crimes ensures justice is served and prevents further harm to others. This paper studies the relationship between wealth inequality and the probability of reporting a crime. Higher wealth inequality can lead to underreporting of crime as individuals with higher socioeconomic status may have greater access to resources and influence to cover up or resolve criminal incidents privately, while those with lower wealth may feel marginalized or distrustful of law enforcement. To answer the question of interest, I collect data on official crime statistics and victimization surveys during the years 2012-2019 in the US for two types of crimes: property crime and violent crime. As my analysis reveals, in both cases the effect of income inequality on the share of reported crimes is significant indicating that with the increase in wealth inequality the share of the reported crimes falls. These findings outline the need for policy implications such as targeted interventions to improve trust in law enforcement among marginalized communities, addressing socio-economic disparities to reduce under-reporting, and enhancing efforts to collect accurate crime data for effective policy-making.