Journal of Criminal Justice 41 (2013) 220227

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Journal of Criminal Justice

Unemployment, business cycles, crime, and the Canadian provinces

Martin A. Andresen
Associate Professor, School of Criminology, Institute for Canadian Urban Research Studies, Simon Fraser University, 8888 University Drive, Burnaby, BC V5A 1S6, Canada

a r t i c l e

i n f o

Available online 14 June 2013

a b s t r a c t
Purpose: Test the Cantor and Land (1985) model using multiple measures of the state of the economy.
Methods: A panel data set of the 10 Canadian provinces, 1981 2009, is analyzed using a hybrid modeling
approach called a decomposition model. Rather than one economy-related model, four are included in the
analysis: gross provincial product, gross provincial product per capita, unemployment rate, and low income.
Results: All economy-related variables matter for property and violent crime, but the sign and magnitude of
the estimated parameters vary based on context.
Conclusions: The relationship between the economy and crime is complex. Only including one economyrelated variable appears to result in omitted variable bias. As such, any evaluation of the relationship between
the economy and crime must consider multiple measures of the economy.
2013 Elsevier Ltd. All rights reserved.

Introduction
Criminological research that investigates the relationship between
economic performance and crime has a long history that dates back to
the work of Shaw (1929) and Shaw and McKay (1931, 1942). As
discussed by Cantor and Land (1985), the theoretical models operating
behind this relationship include strain theory, utilitarian or rationalchoice theories, conict theories, and opportunity theories (Cantor &
Land, 1985). One limitation of this older research is that many of these
theoretical models are related to one another, but were often not considered in a common framework. Cantor and Land (1985) rectied this
limitation through the formulation of a model that considered the unemployment rate as representative of the state of the economy. Their model
integrated previously disparate theoretical models, recognizing that the
total effect of unemployment can be decomposed into motivational
and guardianship/opportunity factors. In their subsequent empirical
analysis, Cantor and Land (1985) found that the opportunity effect dominates the motivation effect, particularly for property crime.
The model put forth by Cantor and Land (1985) generated a large
body of subsequent research investigating the relationship between
unemployment and crime. Though there is much disagreement over
the empirical validation of the Cantor and Land (1985) model, most
notably regarding whether motivation dominates opportunity, the
theory behind the empirical model is not questioned often. Over the
past decade, research on the relationship between unemployment
and crime raises two issues with the current state of research: rst,
the disagreement involving the empirical research, and resulting inconsistencies in empirical results, is a product of complications inherent in the statistical models used to test the Cantor and Land (1985)
Tel.: +1 778 782 7628; fax: +1 778 782 4140.
E-mail address: andresen@sfu.ca.
0047-2352/$ see front matter 2013 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.jcrimjus.2013.05.006

model of unemployment and crime; and, second, unemployment

may not be the most appropriate measurement of economic performance to test this model (Arvanites & DeFina, 2006).
This paper considers both of these issues using the Canadian provinces (1981 2009), variables representing unemployment, gross provincial product, and low income, and a methodological approach that
allows for the separation of motivation from opportunity through the
use of short- and long-run effects of the relationship between economic
performance and crime. The use of unemployment, gross provincial
product, and low income allows for a comparison of these variables,
not previously undertaken, and the methodological approach addresses
the complications in previous empirical research.
The contribution of this paper, therefore, is both methodological and
empirical. From a methodological perspective, a statistical method is
employed that, as argued below, is better suited to identify the relative
effects of motivation and opportunity on crime. The proper identication of motivation and opportunity effects are obviously critical to any
assessment of the Cantor and Land (1985) model. Through the use of
panel data on Canadian provinces, 1981 2009, this paper adds to the
small number of panel data analyses in this literature (Arvanites &
DeFina, 2006). Moreover, the use of panel data involves greater sample
sizes that permit more control variables in an effort to avoid omitted
variable bias and obtain greater precision in the estimates of the relationship between the state of the economy and crime (Levitt, 2001).
Empirically, measures of unemployment, gross provincial product,
gross provincial product per capita, and low income are all used in an
effort to identify the impact of the state of the economy on crime. In
combination with the different statistical methodology, this allows for
new insight into the nuances of the Cantor and Land (1985) model. As
outlined by Arvanites and DeFina (2006), the variable(s) measuring
the state of the economy are central to the Cantor and Land (1985)
model. The unemployment rate is but one of a number of variables

M.A. Andresen / Journal of Criminal Justice 41 (2013) 220227

that may be used to represent the state of the economy. As such, if multiple variables are available, sensitivity analyses should be employed.
Lastly, the use of Canadian provinces allows for an extension of
this research beyond this largely U.S.-based research. Though there
may not be any reasons, a priori, to expect different relationships in
another Western context, this expectation needs to be tested rather
than assumed. In the analysis below, we nd that that both motivation and guardianship matter for crime, but they operate differently
based not only on the time frame of analysis but the crime type.
The unemployment and crime relationship
Empirical research1
In their seminal work on the relationship between unemployment
and crime, Cantor and Land (1985) state that once the model is properly
specied, the impact of contemporaneous unemployment (opportunity) on crime is negative. Such a statement that is in contrast to years
of research in criminology most often generates a signicant amount
of subsequent research, and there is no exception here. For more than
twenty-ve years now, many researchers have argued over the unit of
analysis, statistical methods, and the appropriate measurement of economic performance.
Conventional wisdom in criminology was that the relationship between unemployment and crime was positive and that this relationship
was stronger for property crime than violent crime. However, in a review of sixty-three empirical studies, Chiricos (1987) found mixed results that depended on the statistical method used in the analysis. The
same was true for the empirical evaluations of the Cantor and Land
(1985) model, with the most common criticism being related to statistical methods. These empirical evaluations can be separated into those
that consider unemployment and those that consider other variables
to represent economic conditions, each discussed in turn.
After considering a number of statistical issues, Hale and Sabbagh
(1991) found evidence for a motivation effect (positively associated
with crime) but not for an opportunity effectsee Cantor and Land
(1991) for a rebuttal and Hale (1991) for a subsequent response.
Smith et al. (1992) analyzed homicide, robbery, and burglary nding
support for both motivation and opportunity. Considering the importance of measurement, Britt (1997) found that the particular form of
the unemployment rate was critical. He found that homicide, robbery,
and burglary had positive relationships with unemployment rates for
adults, but unemployment rates for youth were negatively related to
homicide and aggravated assault.
In a special issue on unemployment and crime, Greenberg (2001)
cited a number of concerns with the unemployment and crime literature.
These concerns ranged from statistical misspecication to the operationalization of independent variables to units of analysis to statistical/
econometric methods. Generally speaking, Greenberg (2001, p. 323)
was clear in his statement that manyperhaps mostsociological
analyses of crime rate time seriessuffer from serious methodological
deciencies. Needless to say, more than fteen years after the Cantor
and Land (1985) model had been published, fundamental issues in its
identication had yet to be resolved.
In the context of state-level data for all of the United States, Levitt
(2001) estimated a negative or statistically insignicant parameter for
unemployment. Levitt (2001) used a panel data set and corresponding
statistical method that raises the importance of short- versus long-run
effects in the unemployment and crime model: are you interested in
what will happen if you alter the variable of interest (short-run effect),
or are you interested in the ecological distributions of the two variables
(long-run effect)?
The most comprehensive research on the relationship between unemployment and crime is Phillips and Land (2012). In their analysis
that considered counties, states, and the United States as a whole,
Phillips and Land (2012) found strong support for the Cantor and

221

Land (1985) model. In 78 of 84 cases, the expected parameter signs

were estimated and, most importantly, they found that the effects of
motivation are stronger for property crimes than violent crimes, as
would be expected.
Andresen (2012) was the most recent research on the relationship between unemployment and crime, using a panel of census tracts. His analysis conrmed the Cantor and Land (1985) model, but more importantly
was not concerned with motivation versus opportunity, per se. Rather,
Andresen (2012) was concerned with long-run versus short-run effects:
long-run effects corresponded with motivation and short-run effects
corresponded with opportunity. He found that unemployment was positively associated with crime in the long-run and negatively associated
with crime in the short-run. In order to separate long- from short-run effects, Andresen (2012) used a different statistical method in conjunction
with slightly modied theoretical expectations that were incorporated
into the current analysis.
Turning to the research that considers alternative measures of the
state of the economy, Arvanites and DeFina (2006) used a 15-year
panel of U.S. states to nd that economic downturns (measured using
gross state product) matter for property crimes and robbery; this result
was expected because of economic motivation, and is consistent with
Cantor and Land (1985). However, Arvanites and DeFina (2006) also
found that the system activity effect (motivation) dominated the guardianship effect (opportunity). In all their analyses, the guardianship effect had its expected sign, but was always statistically insignicant.
And lastly, Rosenfeld and Fornango (2007) used a measure of consumer sentiment to measure general economic conditions. In this novel
approach of testing the Cantor and Land (1985) model, Rosenfeld and
Fornango (2007) found that consumer sentiment has a negative relationship with crime through both contemporaneous and lagged effects;
the contemporaneous effects are stronger than the lagged effects and
vary in strength across the different crime types analyzed (robbery,
burglary, larceny, and motor vehicle theft). Moreover, when Rosenfeld
and Fornango (2007) also included the more traditional measures of economic conditions (unemployment and economic (GDP) growth) their
results remain robust, meaning that consumer sentiment is largely independent of the effects of unemployment and economic growth. Unemployment is statistically signicant, and negative, for robbery and
motor vehicle theft, whereas economic growth is statistically signicant,
and negative, for robbery and larcenyunfortunately, lagged variables
for unemployment and economic growth are not included in their analysis. As such, this indicates that only including one measure of economic
conditions leads to omitted variable bias. This has implications for statistical modeling that are addressed below.
Theoretical expectations
As stated above, the Cantor and Land (1985) model of unemployment and crime separates the impact of an economic downturn (total
system activity) into two effects: the system activity effect (motivation)
and the guardianship effect (opportunity). Increased motivation leads
to an increase in crime because of economic hardship, and increased
guardianship leads to a decrease in crime because of decreased criminal
opportunities with more people staying home guarding person and
property. This theoretical model results in the following two hypotheses:
Hypothesis 1 (H1). Economic conditions impact the motivational
distribution of the population toward crime; as economic conditions
worsen, this distribution shifts toward higher motivation levels; as
economic conditions worsen, crime is expected to increase.
Hypothesis 2 (H2). Economic conditions impact the frequency and duration individuals are at home, work, recreational activities, and in transit between these places; this leads to people spending less time away
from their home, protecting person and property; as economic conditions worsen, crime is expected to decrease.

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M.A. Andresen / Journal of Criminal Justice 41 (2013) 220227

In order to operationalize and test these hypotheses, Cantor

and Land (1985) assumed that the system activity and guardianship
effects operated at different time frames: the system activity effect
(motivation) had a lagged effect because people do not turn to illegitimate activity as soon as economic hardship occurs, and the guardianship effect occurred immediately (a contemporaneous effect), because
people were at home guarding person and property immediately.
Cantor and Land (1985) found that unemployment has its greatest
impact on property crime, and the guardianship effect dominates the
system activity effect.
As outlined by Andresen (2012), there is an identication problem
with the formulation used by Cantor and Land (1985) and much of the
literature that follows suit. Phillips and Greenberg (2008) state that
the statistical method employed must correspond to the type of questions being asked. In some cases, such as with the Cantor and Land
(1985) model specication, testing multiple hypotheses is too much to
ask of a single statistical method. Therefore, we follow Andresen
(2012) in his use of a hybrid statistical model is used to test H1 and H2.
Before this investigation delves any deeper, it is critical to understand the theoretical dimensions of H1 and H2 in order to identify the
appropriate hypotheses and statistical method. This is most easily
done within the context of routine activity theory. As outlined by
Cohen and Felson (1979), in order for a crime to occur three factors
must be present: a motivated offender, a suitable target, and the lack
of a capable guardian.
H1 is obviously related to the motivated offender. However, Cantor
and Land (1985) state that motivation has a lagged effect on criminal
choice such that it takes time for economic hardship to push an individual to commit criminal acts directly or indirectly increase the demand for crime through the purchase of illegitimate goods. But this
relationship between motivation and crime trends is more complex
than it appears. On the surface, such a stated relationship implies
that a signicant portion of the population (enough to impact crime
statistics) move in and out of criminal activities as the strength of
the economy waxes and wanes. We know this is not the case in the
long run, because of the paradox discussed by Cohen and Felson
(1979) and Felson and Cohen (1980, 1981): economic conditions
were very strong during the 1950s and 1960s yet the crime rate still
rose drastically. In order to ensure that theoretical expectations are
consistent with known facts, a more conservative interpretation
is employed here: individuals who face higher levels of structural
unemployment and/or poorer economic conditions have greater motivation for criminal activity, especially property crime. In the aggregate, members of this population are further along the continuum of
motivation for criminal behavior.
The second hypothesis, H2, addresses guardianship and suitable
targets. As stated above, this effect is expected to occur immediately because people spend more time at home protecting person and property
as economic conditions worsen. If increasing numbers of people spend
more time in the relatively protective environment of the home, increased guardianship occurs because a person at home is guarding
their home, that simultaneously makes these places unsuitable targets;
but because people are home there are also fewer people converging in
time and space outside of the home, reducing the number of suitable
targets for violent crime. As such, in the short run economic conditions
are expected to impact both property and violent crimes.
This leads to a slightly modied set of hypotheses to test:
Hypothesis 1 (H1). Economic conditions impact the distribution of
motivated offenders toward crime; if individuals are faced with
poor economic conditions they are expected to have greater criminal
motivation, on average; in the long-run, poor economic conditions
are expected to lead to higher levels of property crime.
Hypothesis 2 (H2). Economic conditions impact the frequency and
duration individuals are at home, work, recreational activities, and

in transit between these places; poor economic conditions lead to

people spending less time away from their home, protecting person
and property; in the short-run poor economic conditions are expected to lead to lower levels of property and violent crime.
Data and methods
Data
The panel data used contains the 10 Canadian provinces for the
years 1981-2009 were obtained from Statistics Canadas Canadian
Socio-economic Information Management (CANSIM) database. All
crimes are measured as the natural logarithm of the crime rate per
100,000 inhabitants. Violent crime (less robbery) and property crime
(plus robbery) are considered separately to be consistent with previous
research.
Property crime ranges from 2432 to 9313 per 100,000 with an average of 5344 per 100,000; violent crime ranges from 280 to 2994 per
100,000 with an average of 1140 per 100,000. The individual provincial
descriptive statistics show a distinctive regional pattern of generally increasing east to west that is well known but not well understood
(Giffen, 1965, 1976; Kennedy et al., 1991; Andresen, 2009).
The primary variables of interest, unemployment, gross provincial
product, gross provincial product per capita, and low income (percent
of the population) are obtained through CANSIM. Unemployment is
measured as a rate: the percentage of unemployed persons relative to
the 15-64 year old work force in each province; gross provincial product (GPP) is measured in millions of 2002 dollarsall independent variables based on dollars are standardized in the same manner; GPP per
capita is measured in 2002 dollars and represents the average income
in an economy; and low income is the percentage of families spending
20 percent more after-tax income than average on food, clothing, and
shelter (Giles, 2004).
The importance of using multiple measures of the economy is apparent with regard to variable denitions. The unemployment rate, for example, excludes those individuals who are not actively looking for work
as well as those who are underemployed because of economic conditions, leading to an underestimate of any downturn in the economy
(Arvanites & DeFina, 2006; Chiricos, 1987; Greenberg, 2001). Real
GPP, on the other hand, measures overall economic activity in the
same way as gross state product in Arvanites and DeFina (2006) in
their analysis of U.S. states. Because different provinces have different
levels of economic activities at all stages of the business cycle, some
form or normalization must take place. This is commonly done using
GPP per capita (see Arvanites & DeFina, 2006), but may also be done
using the natural logarithm of GPP. This latter transformation results
in measuring relative change in the analysis below that is independent
of population sizes: the impact of a percent change in economic activity
on the crime rate.
This difference in denitions leads to slightly different interpretations of the variables. With regard to unemployment, the relationship
with crime is based on changes in the rate of individuals actually
searching for employment; when there are more individuals unemployed, this will impact motivation and guardianship. Crimes relationship with GPP (per capita), however, is based on changes in actual
economic activity. A decrease in economic activity represents a contraction in the economy that indicates fewer opportunities in property
crimes, but is also may better capture people out of the labor force
and the underemployed. Lastly, the percent of low income families is
interpreted as the relationship between crime and the percentage of
families who have to spend a disproportionate percentage of their income on the lifes necessities of food, clothing, and shelter. As such, a
variable that considers low income is best able to capture the motivation side of the Cantor and Land (1985) model because it measures
those who have the greatest incentives to commit pecuniary-based
crimes.

M.A. Andresen / Journal of Criminal Justice 41 (2013) 220227

The bivariate correlations between these four variables of interest,

though in the expected direction, are not great in magnitude. In fact,
the only correlation coefcient that exceeds 0.50 is that between GPP
per capita and the unemployment rate, -0.66. Clearly, these variables
each contain meaningful levels of independent variation, that gives
credence to using more than one measure of the state of the economy
to test the predictions of the Cantor and Land (1985) model. The expectations for these variables are to be positively associated with
crime in the long-run and negatively associated with crime in the
short-run (unemployment and low income), and negatively related
to crime in the long-run and positively associated with crime in the
short-run (GPP and GPP per capita).
All control variables are also obtained through CANSIM. Fourteen
control variables are employed, the most in any other study known to
the author, that are selected based on routine activity theory and social
disorganization theory. The fundamental concepts of population turnover and ethnic heterogeneity (social disorganization theory) lead to
social disorganization and, hence, crime because it takes time to generate cohesiveness in an area to repel crime (Cahill & Mulligan, 2003;
Lowenkamp et al., 2003; Sampson & Groves, 1989; Shaw & McKay,
1931, 1942). Consequently, places with higher degrees of population
turnover (residential instability) and ethnic heterogeneity (cultural differences, language differences, etc.) may prove more difcult to generate social cohesion leading to crime. In the context of ethnic
heterogeneity, one must be careful because ethnic heterogeneity does
not necessarily imply cultural and language differences; many ethnic
minorities in North America have lived here for generations and have
adopted North American culture and language (Andresen, 2006a,
2006b, 2007). A more direct measure of the consequences of ethnic
heterogeneity is immigration, measured in a variety of ways, discussed
below.
In order to capture the presence of motivated offenders, the following variables are employed: young males, percent; Gini coefcient.
Both of these variables are expected to have a positive relationship
with crime in the long-run and the short-run. This is because they capture the increased presence of the most crime-prone sub-population
(young males) as well as relative economic hardship that may lead to increased illegitimate economic activity (Hirschi & Gottfredson, 1983;
Kennedy & Forde, 1990; Miethe et al., 1987). Alcohol spending, percent
of GPP, is included because of its known relationship with crime
(Grubesic & Pridemore, 2011) and is also expected to lead to increases
in crime in the long- and short-runthis is technically not motivation
but alcohol impacts potential offenders.
Capable guardianship, or lack thereof, is measured using: number of
police ofcers; police ofcers per capita; corrections spending, percent

223

of GPP; and criminal incidents per ofcer. The rst three variables are
expected to have positive relationships with crime in the long-run
and negative relationships with crime in the short-run. It is expected
that places with long-term, i.e. structural, crime problems will have
greater levels of police personnel leading to a positive relationship
between police and crime. In the short-run, however, an increase in
police in interpreted as an increase in capable guardianship over and
above any long-term structural relationships between police and
crime. Criminal incidents per ofcer is expected to have a positive relationship with crime in both the long- and short-run because this
captures a workload issue: increases in criminal incidents per ofcer represents a relative underrepresentation of the police in that area, a lack of
formal guardianship.
Immigration is measured using eight different variables: immigrants,
percent; immigrants, young male, percent; net immigrants, percent; net
immigrants, young male, percent; interprovincial immigrants, percent;
interprovincial immigrants, young male, percent; interprovincial net
immigrants, percent; and interprovincial net immigrants, young male,
percent. There are three primary distinctions within this set of variables:
(gross) immigration versus net immigration; international versus interprovincial, or external versus internal, (im)migration; and total immigration versus the immigration of young males. With the inclusion of
migrating young males, this allows for the separation of potential
immigrant-based relationships with crime and simply the increases in
the population of young males that happens to be from immigration.
As such, it may not be immigration, per se, just the immigration of the
known most criminogenic sub-population (see Hirschi & Gottfredson,
1983 and Boyd, 2000). As such, the expectation for the immigration variables that involve young males is positive in the long- and short-run. The
expectations for the remaining immigration variables are for their estimated parameters to be either negative or statistically insignicant.
This is based on the recent research on immigration and crime, particularly at the macro-levelsee Ousey and Kubrin (2009) and Stowell et al.
(2009).
Though this list of variables is not as extensive as in research using a
census that corresponds to social disorganization theory and routine activity theory variables, it consists of all variables that relate to these theories that are available for this time frame. The descriptive statistics for
the control variables are shown in Table 1. These are based on the yearly
provincial values, with equivalent statistics available for each province
to the interested reader.
Lastly, we include two trend variables to account for the increase in
all crime rates during the 1980s and subsequent crime drop in the
1990s: Trend and Trend2. Trend takes on sequential values (1, 2, 3, )
for each year and each province. Therefore, Trend ranges from 1 to 29

Table 1
Descriptive statistics, independent variables, Canadian provinces, 1981 2009
Independent Variable

Minimum

Maximum

Mean

Std. Dev.

GPP, millions 1992 dollars

GPP per capita, 1992 dollars
Unemployment, percent
Low income, percent
Young males, percent
Gini coefcient
Alcohol spending, percent of GDP
Number of police ofcers
Police ofcers per 100 000
Criminal incidents per ofcer
Corrections spending, percent of GDP
Immigrants, percent
Immigrants, young male, percent
Net immigrants, percent
Net immigrants, young male, percent
Interprovincial immigrants, percent
Interprovincial immigrants, young male, percent
Interprovincial net immigrants, percent
Interprovincial net immigrants, young male, percent

1995
16141
3.4
4.96
18.13
34.7
0.71
178
136.76
24.1
0.05
0.05
0.01
-0.05
-0.01
0.26
0.04
-1.91
-0.59

527027
66100
20.2
20.03
32.6
44
3.18
25558
273.63
84.01
0.24
1.39
0.23
1.24
0.21
4.37
1.32
1.6
0.61

98542
30563
9.97
11.52
22.94
39.74
1.59
5519
179.11
48.41
0.14
0.43
0.07
0.3
0.05
1.5
0.31
-0.12
-0.06

123131
8697
3.79
2.91
3.12
1.97
0.47
6670
21.00
13.37
0.04
0.34
0.05
0.31
0.04
0.65
0.16
0.50
0.15

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M.A. Andresen / Journal of Criminal Justice 41 (2013) 220227

for each province, 29 years from 1981 2009. Trend2 is the square of
Trend. The crime drop is a well-documented phenomenon that is present across countries all over the world, including Canada and its provinces (Tseloni et al., 2010; Farrell et al., 2011). A number of other
time-varying effects were used in the analyses with no qualitative
changes in the results.2 Consequently, this approach was taken because
of its economy of variables.
Statistical methods
In order to test the hypotheses H1 and H2, statistical methods that
are capable of identifying their respective predictions are critical. In
the case of H1, a statistical method that identies long-run relationships
is necessary, where as H2 requires a statistical method that can identify
short-run relationships. In this particular situation, there are two
modeling approaches that may be undertaken.
The rst modeling approach considers the long- and short-run relationships independently. A statistical method that identies long-run relationships, H1, is the often-used single-year ecological cross-section. As
outlined by Kennedy (2008, p. 287), an analysis using a single-year ecological cross-section identies long-run relationships between the dependent and explanatory variables. Fundamentally, the question being
answered with this method is whether or not the ecological distribution
of one variable is related to the ecological distribution of another
variable? Or, alternatively, do places with high levels of unemployment
also have high crime? This particular statistical method investigates
ecological stability: crime and unemployment rates may rise and fall
year-to-year, but the relative ecological distribution of these variables remains the same. This allows for the identication of motivation and testing H1. In the current context, this method may be performed on any
given year in the data set, a subset of the years, or all years individually.
Such an analysis assumes the data represent processes that are in equilibrium, extracting the average relationship between the dependent
and independent variable(s) or interest. Ideally, this statistical method
has a data set with a large number of ecological units and is not practical
in the current context because there are only 10 Canadian provinces.
A statistical method that identies short-run relationships, H2, is the
xed effects panel data method. With this statistical method, the xed
effects estimator is based on the time series component of the data, it
estimates the short-run effects (Kennedy, 2008, 287); or, as stated by
Steven Levitt, when using xed effects panel estimation only the
short-term relationships between the variables will be reected in the
parameter estimates (Levitt, 2001, p. 382).3
The second statistical modeling approach considers both the longand short-run relationships simultaneously. This hybrid model is often
referred to as a decomposition model, allowing for the simultaneous
estimation of long-run relationships (between-group effects) and shortrun relationships (within-group effects) (Allison, 2005; Kaufman, 1993;
Phillips, 2006). This hybrid model pools all the single-year ecological
cross-sections together, similar to a xed effects model, but adds in another variable to account for short-run changes, discussed below. The
general results of this hybrid model and separate models single-year
models for identifying long-run effects are the same. However, the
hybrid model has the advantage of estimating average results for all
ecological cross-sections rather than for each (yearly) ecological crosssection of data. This is done by calculating the average value for each
variable under analysis within each ecological cross section. Consequently, the hybrid modeling approach avoids the potential pitfall of
analyzing an aberrant single-year ecological cross section of data.
Short-run relationships are identied through the use of the additional variable mentioned in the previous paragraph. This additional
variable captures the differences between the individual yearly observations for each of the variables and its average value within each
ecological unit. This is equivalent to the xed effects variables in a
xed effects model. Consequently, there is no need for further xed
effect dichotomous variables and this modeling approach allows for

the identication of year-to-year short-run effectsthe results from

this are the same as the xed effects estimator.
Overall, this hybrid modeling approach allows for the identication
of long- and short-run relationships, avoids the potential of analyzing
an aberrant year of data, and minimizes the volume of output because
only one set of long-run relationships is estimated rather than one for
each year under analysis. As such, in the analysis below, this hybrid statistical model is used to test H1 and H2. These two modied hypotheses
are unambiguously testable using the hybrid statistical method outlined
below, with the output within this hybrid statistical model being able to
determine the relative strength of motivation and opportunity.
All estimation is undertaken using R: A Language and Environment for Statistical Computing bhttp://www.R-project.org>. The dependent and independent variables listed above are estimated in
the following general specication4:


yjt X j xjt X j

where yjt is the natural logarithm of a crime rate in province j at time t,

is the common intercept, is the estimated parameter for the long-run
effect of variableX j , is the estimated parameter for the short-run effect
of variable X that is measured as deviations from its average value over
the time frame of analysis (xjt - X j ). The sample size is 290, Whites
heteroskedastic-autocorrelation consistent standard errors are used
for all statistical signicance testing and subsequent tests for serial correlation are statistically insignicant.
One nal concern for the statistical modeling, particularly with a
large number of control variables, is multicollinearity. Though multicollinearity does not impose bias on the resultsremoving variables to
address multicollinearity may impose omitted variable basisit does
inate standard errors potentially leading to the appearance of a (set
of) variable(s) being statistical insignicant (Kennedy, 2008). Such a
situation would be particularly problematic if a high degree of multicollinearity was present within the variables of interest. In the current
analysis, this is not the case. Considering bivariate correlations between
the 11 independent variables that do not involve immigration there
is only one that exceeds 0.80all correlations are available to the interested reader.
Though there is no established rule of thumb in this context,
researchers have used 0.80 as a threshold for concern (Andresen,
2006a). Additionally, we may consider the literature discussion correlations. OBrien (2007) discusses the variance ination factor (VIF) and
multicollinearity in a regression context. He states that a VIF ranging
from 5 to 10 tends to cause concern. In a bivariate context this approximately leads to a correlation coefcient that ranges from 0.80 to 0.90.
As shown below, there is no systematic statistical insignicance for
these 11 variables indicating that multicollinearity is a problem. The
same cannot be said for the immigration variables. The bivariate correlations between the immigration variables are most often greater than
0.80, giving an indication of potential statistical signicance issues
resulting from multicollinearity. This is conrmed in the analysis
below with all but two of the long-run effects not being estimated for
the immigration variables. However, all variables are included in the
various analyses in the interest of avoiding omitted variables bias.
Results
A preliminary set of results, not shown for the purposes of brevity
and succinctness, revealed the impact on short- and long-run effects
with various combinations of the economy-related variables. Similar
to analyses in other contexts, estimated parameters change in magnitude signicantly (but remain the same sign), reverse signs, and move
from statistically signicant to insignicant and back againsee a review of similar results in the context of the structural covariates of homicide (Land et al., 1990). These results are available to the interested

M.A. Andresen / Journal of Criminal Justice 41 (2013) 220227

reader, but clearly show the impact of omitted variables in a statistical

analysis.
The nal set of results, Table 2, includes all four of the state of the
economy variables: the unemployment rate, GPP, GPP per capita, and
low income. Rather than show the incremental impact of these variables as discussed above, these results present full models with all variables included for property crime and violent crime. Each is discussed in
turn.
GPP per capita is statistically insignicant in the long- and short-run
for property crime. GPP has a statistically signicant estimated parameter for the long run effect, but it is positive, opposite of expectations. The
unemployment rate has statistically signicant estimated parameters
for both the long- and short-run, both of which are negative. Lastly,
low income has only one statistically signicant estimated parameter,
a positive long-run effect. Needless to say, these overall results are not
particularly consistent with the expectations set out by Cantor and
Land (1985) model. The control variables also reveal some interesting
results. Young males, historically a positive correlate with crime, is
negative and statistically signicant in the long- and short-run. The
Gini coefcient has is expected positive relationship with property
crime. Alcohol spending has positive and negative estimated parameters in the long- and short-run, respectively. The number of police ofcers has a positive relationship with property crime in the long- and
short-run, but the number of police ofcers per capita has a negative relationship with property crime in the long-run and the number of criminal incidents per police ofcer has a positive estimated relationship
with property crime in the short-run. The results for the immigration
variables are mixed, but the general result here is that the immigration
of young males leads to an increase in the property crime rate in the
short-run.
The results for the full model of the state of the economy variables
with the violent crime rate are more consistent than with the property
crime rate. The long- and short-run effects for all four variables are statistically signicant for violent crime. GPP has negative estimated parameters for both the long- and short-run whereas the estimated
parameters for GPP per capita are both positive. The unemployment
rate has the expected signs on its estimated parameters, positive in
the long-run and negative in the short-run. And low income has negative estimated parameters in the long- and short- run. Young males
has the expected positive sign for both the long- and short-run effects.
The estimated parameters for the Gini coefcient are negative in the

225

long-run and positive in the short-run, with the former being opposite
of expectations, similarly for alcohol spending. The number of police
ofcers is negative related to violent crime in the long-run, but positive
in the short-run. The long-run effects of police ofcers per capita and
criminal incidents per ofcer are both positive, as is the short-run effect
of criminal incidents per ofcer. Corrections spending, however, has a
negative and statistically signicant estimated parameter for the shortrun. The results for the immigration variables do have some differences
with the corresponding results for property crime, but generally reveal
the same pattern.
Overall, it is clear that the choice of variable to represent the state of
the economy has a (statistically) signicant impact on the results for
both property and violent crime. The varying results as the state of the
economy variables are included and excluded is an indication of omitted variable bias when only one of these variables is included in the
analysis. This has implications for any analysis that only considers one
of the available variables when testing the Cantor and Land (1985)
model of the relationship between the economy and crime.
Discussion
The relationship between the economy and crime is complex and
encompassed by a number of theoretical frameworks. Perhaps the
best known and complete is the model of unemployment and crime
put forth by Cantor and Land (1985). In their model, Cantor and Land
(1985) outline two counteracting forces from unemployment that
impact crime: motivation and guardianship/opportunity. For over
25 years, scholars have debated the merit of the model itself (though
infrequently) and the varied empirical validations of the model. In this
paper, we contribute to this literature through the inclusion of multiple
measures of economic activity (the unemployment rate, GPP, GPP per
capita, and low income), a statistical method that better allows for the
identication of these two counteracting effects on crime that operate
at different time frames, and an extension of this research to a non-US
context, Canadian provinces.
Overall, the results for the unemployment rate and low income are
the most consistent with expectations, particularly for violent crime.
However, when more state of the economy variables are included in
the analysis the estimated parameters for these variables will at
times switch signs and alter the magnitudes. This indicates omitted
variable bias. Therefore, it is argued that multiple measures of the

Table 2
Regression results, natural logarithm of property crime rate, Canadian Provinces, 19812009, All
Property Crime

GPP, millions 1992 dollars

GPP per capita, 1992 dollars
Unemployment, percent
Low income, percent
Young males, percent
Gini coefcient
Alcohol spending, percent of GDP
Number of police ofcers
Police ofcers per 100 000
Criminal incidents per ofcer
Corrections spending, percent of GDP
Immigrants, percent
Immigrants, young male, percent
Net immigrants, percent
Net immigrants, young male, percent
Interprovincial immigrants, percent
Interprovincial immigrants, young male, percent
Interprovincial net immigrants, percent
Interprovincial net immigrants, young male, percent
Adjusted-R2

Violent Crime

Long Run Effects

Short Run Effects

Long Run Effects

Short Run Effects

2.01*
-0.429
-0.048**
0.863***
-6.27***
0.012
0.878***
2.27***
-1.97*
0.060

0.127
-0.021
-0.014***
0.007
-0.561***
0.016***
-0.156**
0.706***

-7.69***
3.28**
0.127***
-2.28***
18.26***
-0.119*
-1.54***
-5.97***
10.03***
3.59***

-2.99***
2.49***
-0.037***
-0.159**
0.73***
0.026***
0.312***
1.01***

0.96

0.966***
-0.059
-1.94***
15.38***
1.95***
-15.09***
-0.072
-0.222
-0.052
0.296**

0.592***
-0.161**
-1.28
14.88**
1.01
-13.56**
-0.556***
1.28***
0.137*
-0.072

0.95

Notes. Estimated parameters are elasticities. * 10 percent signicance; ** 5 percent signicance; *** 1 percent signicance. All inference based on heteroskedasticity and
autocorrelation consistent errors.

226

M.A. Andresen / Journal of Criminal Justice 41 (2013) 220227

economy must be considered in any evaluation of the relationship between economic activity and crime, not simply one of these variables.
The results for GPP, when signicant, are generally pro-cyclical for
property crime and counter-cyclical for violent crime. This pro-cyclical
relationship between the economy and property crime is not only intuitive, but a relatively established fact in the criminological literature. As
the state of the economy improves, people are willing to spend more of
their income on non-essential consumption items that are of high value
to motivated property offenders. This is the standard story for routine
activity theory. Moreover, research shows that new product introductions (again consistent with routine activity theory) tend to slightly
lead the business cycle (Devinney, 1990; Geroki & Walters, 1995).
This implies that rms attempt to introduce new products with the anticipation of an economic expansion. Therefore, there are not only more,
but new criminal opportunities for property crime when GPP increases
and unemployment decreases. With regard to the counter-cyclical relationship with violent crime, this is perhaps indicative of less strain
when the economy is going wellmotivation for violence is lesser in
these times.
Perhaps most interesting in the context of GPP and GPP per capita is
that their estimated parameters are opposite in sign, particularly for violent crime, despite their expectation being the same a priori. GPP is
counter-cyclical and GPP per capita is pro-cyclical; though statistically
insignicant, the opposite is the case for property crime. Therefore, as
the economy improves property crime increases while violent crime
decreases, but as income (measured by GPP per capita) improves property crime decreases while violent crime increases. The nuances of interpretation using motivation and guardianship can easily be used to
justify these differing results, but a more important implication arises
than justifying effects ex ante.
Though correlated in expected ways, the four variables representing
the state of the economy account for different aspects of the economy:
business cycles, average income, unemployment, and those whose incomes are signicantly below average. It is reasonable to assume that
different measures of the economy are better for capturing motivation
versus guardianship aspects of the Cantor and Land (1985) model.
This clearly has implications for the nature of the Cantor and Land
(1985) model in future empirical assessments and is an additional,
though ex ante, contribution of this paper.
This discussion points to the importance of context within the
Cantor and Land (1985), or any other, theoretical framework: theoretical expectations are not monolithic, rather they vary (at the very least)
by crime type, property versus violent crime. Moreover, it is not a choice
of which measure of economic activity should be used to investigate the
relationship between the nature of the economy and crime, but how
many. Including combinations of the unemployment rate, GPP, GPP
per capita, and low income into the analysis generated much more consistent results for these variables when considering long- and short-run
effects. But also, different variables appear to encompass different aspects of the Cantor and Land (1985) model, motivation and/or guardianship, not necessarily both.
Overall, strong support for the Cantor and Land (1985) model is found
using GPP, GPP per capita, the unemployment rate, and low income in a
hybrid-modeling framework. Though both motivation and guardianship/opportunity matter differently for each variable representing economic activity, guardianship/opportunity emerges more frequently and
consistently than motivation. However, this by no means implies that
one effect dominates the other, only that each effect matters to a greater
or lesser degree for different crime types and variables.
Directions for future research need to follow at least two paths.
First, in an effort to address the implications of using multiple measures of economic activity raised in the current paper, more research
in a U.S. state level context needs to be undertaken with multiple
measures of economic activity simultaneously. This will allow for a
direct comparison between the established research on the Cantor
and Land (1985) model with the results presented in this analysis.

Second, the Cantor and Land (1985) model must also be assessed in
other contexts, namely other nations, at the subnational level. This
will allow for further corroboration of past research and, potentially,
further insight using a similar empirical and methodological approach
as used in this paper.
Notes
1. I focus here on the literature directly related to the Cantor and Land (1985)
model of unemployment and crime. There is, however, a broader set of research examining economic factors and/or economic motivation and c rime. See, for example: Allen
and Cancino (2012), Andresen (2011), Breetzke (2010), Fox et al. (2010), Ng (2010),
Porter and Purser (2010), Sorg and Taylor (2011), and Walters (2011).
2. A cubic trend, xed effects for single years, and within-province quadratic
trends.
3. When using panel data, one may also use a random effects estimator. Random
effects estimation, however, uses both the cross-section and time-series components
of the data such that estimated parameters are a composite of short-and long-run effects. Consequently, when interested in short-run effects, or testing a causal relationship, xed effects estimation is the appropriate panel data estimation method
regardless of the results of the Hausman (1978) test (Phillips & Greenberg, 2008).
4. Because of the number of variables included in the analysis, and are actually
vectors. Eq. (1) is presented in this manner for explanation purposes only.

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