Oil Hikes, Drugs and Bribes: Do Oil Prices Matter for Crime Rate in Russia?

Authors

  • Dmitry Burakov Financial university under the Government of the Russian Federation

Abstract

In this article we test the hypothesis about the impact of oil prices shocks on the unemployment and crime rate on the example of oil-exporting country. According to the hypothesis, there exist a dependence of the labor market on oil revenue. A negative oil price shock should lead to a decrease in the employment rate, which in turn should lead to a rise in illegal forms of behavior. Illegal behavior is measured as an average of registered crimes (bribery and drug dealing). Based on data for 1990-2017 we study a case of Russia, using vector error correction model for detecting short- and long-term effects. Results show that oil prices and unemployment affect crime rate in the long-run in a case of oil-exporting country. Yet, in the short-run both negative oil shocks and a rise in unemployment rate lead to a statistically significant increase in bribery and drug dealing. A 1% decrease in oil price will lead to a 1,14% rise in bribery and drug dealing and a 1% increase in the unemployment rate leads to a 2,72% increase in drug dealing and bribery.Keywords: oil prices, unemployment, crime rate, bribery, vector error correction approach.JEL Classifications: Q41, E24, F43, K42DOI: https://doi.org/10.32479/ijeep.6833

Downloads

Download data is not yet available.

Author Biography

Dmitry Burakov, Financial university under the Government of the Russian Federation

Department of Monetary Relations and Monetary Policy, PhD in Economics, associate proffesor

Downloads

Published

2018-12-07

How to Cite

Burakov, D. (2018). Oil Hikes, Drugs and Bribes: Do Oil Prices Matter for Crime Rate in Russia?. International Journal of Energy Economics and Policy, 9(1), 84–94. Retrieved from https://econjournals.com/index.php/ijeep/article/view/6833

Issue

Vol. 9 No. 1 (2019)

Section

Articles

License

Submission of an article implies that the work described has not been published previously , that it is not under consideration for publication elsewhere, that its publication is approved by all authors and tacitly or explicitly by the responsible authorities where the work was carried out, and that, if accepted, will not be published elsewhere in the same form, without the written consent of the Publisher. The Editors reserve the right to edit or otherwise alter all contributions, but authors will receive proofs for approval before publication.