Habib Ansari Samani; masoume Rouzbahani
Abstract
Introduction The main keys that influence crime rates are examined from two economic and sociological points of view. Preventing crime is one of the requirements of any healthy society. Economic inequalities and unfair distribution can be the main reasons of crimes. The complexity of the relationship ...
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Introduction The main keys that influence crime rates are examined from two economic and sociological points of view. Preventing crime is one of the requirements of any healthy society. Economic inequalities and unfair distribution can be the main reasons of crimes. The complexity of the relationship between justice and fairness on the one hand and the indicators of the distribution of economic benefits from the other hand admit the essentiality of the examining relationship between income inequality and crime rates. Recent researches have shown that income inequalities and economic discrimination are among the top priority factors that affect social crimes. This research studies the effect of various economic justice indicators on crime rates in the provinces of Iran. Theoretical frame work Studies show that the economic situation has significant effects on individual activities, including crime. In addition, the feeling of being deprived of success and exacerbating this feeling in relation to successful people (the existence of inequality) can be a source of criminal behavior (Stolzenberg et al., 2006). People who are frustrated by their failures in their community become more annoying when confronted with successful people around them. According to this theory, poor people in a situation of high inequality are more likely to commit criminal acts (Enamorado, et al., 2016). The sense of deprivation can be due to various factors such as belonging to an ethnic minority, Ethnic heterogeneity, or income inequality. Runciman& Runciman, (1966) argues in the theory of relative deprivation that income inequality has created a sense of expropriation in one person and increases injustice, thereby increasing the amount of crime committed by increasing inequality of income (Rufrancos et al., 2013). Economic and social inequalities increase the crime rate by weakening social integration and increasing the social class gap (Wilkinson & Pickett, 2010). Methodology Choe (2008) shows that the amount of crime in the past period has a great effect on the crimes of the current period. Therefore, to test the hypotheses, the GMM Arellano and Bond (1991) method is used to estimate the model. The following models are estimated for 28 provinces of Iran during the period 2000-2015. (1) (2) (3) (4) Where is the number of crimes divided by province population, represents the Gini coefficient, is discrimination indicator from a capacity viewpoint, is discrimination indicator from a need viewpoint and is the average of and . Economic discrimination index is the province's current and capital government budget divided by the capacity share (population, value-added, and area), and share of needs (unemployment rate, illiteracy rate, and life expectancy) of each province[1]. expresses the unemployment rate, is per capita GDP, is government size (division of provincial government expenditures on provincial GDP) and is the urbanization rate (urban population divided by the total population). Results and Discussion The results of the estimation of regression models are presented in Table 1. Table 1: Regression coefficients by two stage stepwise generalized moments Model/Variable 1 2 3 4 Gini coefficient 10.838*** 0.000 Capacity Discriminative Index 8.343*** 0.000 Need Discrimination Index 8.035*** 0.000 Total index of discrimination 9.702*** 0.000 Unemployment rate 0.727*** 0.581*** 0.746*** 0.552*** 0.001 0.002 0.000 0.005 GDP per capita 150.871*** 118.595*** 160.182*** 117.769*** 0.000 0.000 0.000 0.000 Government Size -0.83 -0.115*** -0.099*** -0.113*** 0.064 0.000 0.000 0.000 Urbanization rate 1.153*** 1.443*** 1.324*** 1.433*** 0.000 0.000 0.000 0.000 CRIME (t-1) 0.562*** 0.506*** 0.523*** 0.508*** 0.000 0.000 000/0 0.000 Sargan chi-2 24.408 26.929 25.391 27.310 *** is 99% significance level and the values inside The results indicated in Table 1 show that the effect of all indicators of economic inequality on crime is positive and significant. The effect of the unemployment rate and GDP per capita on crime is positive and significant in all four estimated models. The effect of government size on the crime rate is negative and significant in models 2-4. That means government spending has been increasing welfare and reducing inequality. The impact of urbanization rates on crime in all models is positive and significant. Results show that the impact of migrations to cities and the marginalization of households increase crime. The causality test also shows that all indicators of economic inequality are the statistical cause of crime, but there is no inverse relationship. Conclusions and Suggestions The results show that there is a statistically significant relationship between crime and economic inequalities. Also, causality shows that in addition to statistical relationship, causality relationship also exists. Hence, reducing income inequality and economic discrimination is needed to reduce crime. Economic discrimination of government spending can also increase the rate of crime in the provinces. Therefore, governments should realize that the discriminatory spending of governments, in needs and talents viewpoint, can in addition to slow down economic progress, lead to social harms. The results show that government size had a negative impact on the crime rate. The relationship between unemployment and crime also indicates the importance of reducing unemployment in reducing crime rates. It seems that the positive relationship between economic growth and the crime rate was due to an increase in crime benefits because of rising incomes, and because the wealthy regions are due to the opportunities available for theft (which constitute a large amount of total crime) will attract more criminals (Khan et al., 2015). Finally, increasing the urbanization rate increases the crime rate. Immigration and marginalization of cities seem to have a damaging effect on the health of the community. [1]. See Ezzati (2013) for further study on this index.
Habib Ansari Samani; Razieh Davoodi
Abstract
Value Added Taxes, as a suitable substitute for all types of sales taxes, despite the benefits, lead to disadvantages such as the pressure on the general level of prices (Ikpe & Nteegah, 2013). As inflation has always been one of the most important problems in the Iranian economy, it was a concern that ...
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Value Added Taxes, as a suitable substitute for all types of sales taxes, despite the benefits, lead to disadvantages such as the pressure on the general level of prices (Ikpe & Nteegah, 2013). As inflation has always been one of the most important problems in the Iranian economy, it was a concern that in a situation where the country faces a severe structural inflation and inflationary sanctions, will the implementation of the value added tax program increase inflation?
Taking into account the predictions made by the researchers and the executives of the project, we aim to study the issue. 7 years have passed since the VAT was implemented, therefore, it will be necessary to survey the effects of this tax. This paper will survey the inflationary effects of VAT in Iran provinces.
Theoretical Framework
Implementation of value added tax (VAT) from two direct and indirect channels affects the general level of prices. Since the value added tax is an indirect tax based on consumption, a portion of this tax burden is imposed on the final consumer. As a result, implementation of VAT, at least in the early stages, directly leads to a leap in the price of goods and services that are taxed.
Also, the implementation of the value added tax affects the general level of prices indirectly by affecting determining factors of inflation, such as liquidity, expectations and production costs. Experiences of different countries in controlling inflationary effects of VAT show that there are two issues in this regard. The first is which tax does VAT replace? (Which taxes have been eliminated) and the second is the country’s monetary situation (Tait, 1988). If the value added tax replaces one or more direct and indirect taxes, it does not impose a severe pressure on prices because the amount of tax received from the goods does not change much, and only the types of taxes and taxation methods change.
The study of other countries’ experiences shows that if inflation control is one of the main goals of monetary and credit policies and that the government in monetary and financial policies takes into account the issue of inflation, then the implementation of the VAT system along with the inflation controlling short-run policies can be made without a sharp increase in prices (Naderan & Ranjabarkey, 2008).
Methodology
In order to test the hypothesis that VAT has a positive and significant effect on inflation in Iran's provinces, we use provinces variables such as inflation, effective rate of VAT, unemployment rate, current and construction, local government size, oil and without oil production per capita, and the ratio of deposits to production from 2008 to 2013. The Econometric hypothesis testing method is a multivariate regression analysis with panel data.
Findings
The findings show that there is a positive and significant relationship between unemployment rate and provinces’ inflation, which shows the stagflation in Iran's economy Moreover, the current size of the government has a positive effect on inflation, since an increase in government spending will lead to an increase in the budget deficit, public sector debt will increase, and will lead to an increase in the supply of money. Given the positive relationship between the general level of prices and liquidity, raising the money supply will lead to an increase in the general level of prices. Whatever the state budget allocates to development expenditures and government development expenditures by improving production and strengthening the supply side will cause macroeconomic surpluses and will reduce inflation. Since VAT affects the sale price of final goods, it is likely that sellers will conceive of increasing production costs and transfer tax burden to consumers. On the other hand, some manufacturers of goods that are not subject to VAT imagine that the tax on their goods and services will also apply and increase the price of their goods. Therefore, the findings show that there is a positive and significant relationship between the value added tax and inflation in the provinces of the country. The high ratio of deposits to production in the in the ceteris paribus situation indicates that people prefer to hold liquidity in banks. This liquidity will be driven by investment in the supply of various sectors of the economy and will reduce inflation. An increase in domestic production of oil will lead to an increase in the supply of foreign currency and, subsequently, a decline in the exchange rate. Due to the negative relationship between the exchange rate and the rate of inflation, the exchange rate cuts have led to an increase in inflation, and the negative relationship between oil production and inflation is justified. Also, the findings show that there is a positive and significant relationship between the oil-free domestic production and inflation in different provinces.
Conclusions and Suggestions
In this study, the inflationary effects of VAT were investigated using multivariate regression in panel data. For this purpose, after collecting provincial data, the inflation effect of VAT in a model with dependent variable of price level growth rate along with the major variables affecting inflation was measured. Given the positive impact of VAT on inflation, it is recommended that the government initially takes caution in increasing the VAT rate, and secondly, pay closer attention to direct taxes and alternative VAT taxes that have high incomes and low inflationary effect.
