The economic consequences of crime in Italy

Purpose – The purpose of this paper is to employ provincial data to study the relationship between several crime typologies, namely murder, robbery, extortion and fraud and economic output in Italy. Design/methodology/approach – The authors propose a spatial econometric approach where the spatial proximity is defined by a measure of physical distance between locations, in order to take into account possible spill-over effects. Findings – The results of the spatial estimation suggest that criminal activities, namely murder and robbery, exhibit a negative impact on Italian gross domestic product while fraud and total crime do not affect economic output and that there are beneficial spill-overs from neighbouring provinces. Originality/value – The study empirically shows that only violent crimes have a crowding-out effect on economic output.