Does immigration increase crime? The advantage of dynamic threshold models with finer geographic units

Abstract

This study investigates whether immigration and crime rates are positively related, by applying dynamic panel threshold models to fine geographic units. This is distinct from previous studies, in which static and continuous models are applied to coarse geographic units. This analysis reveals that the immigration-crime relationship has structural breaks (or discontinuities). The favorable ethnic network externalities on crime emerge after the immigrant share reaches a certain level in the community. This analysis also shows that the immigration-crime relationship observed in fine geographic units disappears when coarsely classified units are used. If geographic aggregation obscures heterogeneity among cities, the immigration-crime relationship is underestimated. These results suggest the advantage of dynamic threshold models with fine geographic units compared to traditional static and continuous models with coarse geographic units when discussing the immigration-crime relationship.