Analysis of crime in Chicago: new perspectives to an old question using spatial panel econometrics

Chicago earned an infamous reputation as the ``crime capital of the world'' in the days of organized crime during the prohibition. Nowadays the city still has a high crime rate. Its rapid urbanization has been associated with socio-economic disparities. Consequently, Chicago is an ideal case for studying linkages between urbanism and crime. The objective of this paper is to identify the determinants of violent crime in Chicago over the period 2009-2011. Violent crime in Chicago is generally well explained by our application of the theory of social disorganization. This finding corroborates the results of previous studies conducted on 1990s Chicago crime data. The subprime crisis does not appear to have had an impact on the determinants of crime in the city. Compared to previous studies based on the same theory, we provide an interpretation of the impacts of variables that takes into account the joint temporal and spatial dimension of data. Furthermore, spatial panel econometric tools enable specific analysis of neighborhood effects and provide an understanding of the diffusion and friction effects of crime in urban space.