Does Tax Evasion Affect Economic Crime?
39 Pages Posted: 25 May 2018
Date Written: April 09, 2018
This paper examines the impact of tax evasion on criminal activities in Italy. Specifically, we consider three types of crime that are related to economic determinants: property crimes (including robbery, theft and car theft), fraud and usury. We estimate a dynamic panel using annual data from the Italian provinces (NUTS-3) for the 2006-2010 period and show that tax evasion positively affects economic crimes. Notably, the elasticity of tax evasion to fraud is related to the size of the tax burden; in addition, these crimes demonstrate different levels of persistence over time, reflecting different adjustment costs. Finally, we find that property crimes, fraud and usury are not influenced by deterrence or clearing-up variables.
Keywords: property crime, usury, fraud, tax evasion, deterrence effect
JEL Classification: C330, H260, K420
Suggested Citation: Suggested Citation