Investigation of the relationship of crime rate and economic growth in selected EU countries by soft panel regression

Crime and its consequences are a major subject of study in many fields, especially in the field of economics. The tendency of individuals to commit crimes varies according to the countries they live in and the geography they live in. In general terms, crimes against life, crimes against body immunity and crimes based on honor are committed for the purpose of personal pleasure and satisfaction, while crimes against property such as theft, looting and fraud show that individuals turn to crimes for economic reasons. In this context, in this study, the effect of crime rates on economic growth was examined with the smooth transition panel regression (YGPR) method, which is one of the non-linear panel regression models. In the application of the YGPR method, 2011 fixed prices and annual GDP per capita ($) variables were used in the relationship between the crime rates and economic growth in selected EU countries between 1993 and 2017. According to the results obtained from the study, the threshold parameter for per capita GDP was found to be 9,687, that is, $16,106.00. Therefore, while crime rates increase below the threshold level, crime rates decrease if it is above this threshold level.