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Discussion Paper

No. 2012-4 | January 13, 2012
The Effect of Tourism on Crime in Italy: A Dynamic Panel Approach
(Published in Special Issue Tourism Externalities)

Abstract

The purpose of this paper is to demonstrate that, all else being equal, for the case of Italy, tourist areas tend to have a greater amount of crime than non-tourist areas in the long run. Following the literature of the economics of crime à la Becker (1968) and Ehrlich (1973) and using a system GMM approach for the time span 1985–2003, the authors empirically test whether total crime in Italy is affected by tourist arrivals. Findings confirm the initial intuition of a positive relationship between tourism and crime in destinations. When controlling for the difference between tourists and residents in the propensity to be victimized, no relevant differences are found: the likelihood to be victimized is quite similar for the two groups. As a consequence, agglomeration and urbanisation effects seem to be the main explanation for the impact of tourism on crime. One can image that overcrowded cities provide more opportunities to criminals to commit illegal activities regardless of the number of visitors and residents in destinations.

Paper submitted to the special issue
Tourism Externalities

JEL Classification

D62 K00 L83

Cite As

Bianca Biagi, Maria Giovanna Brandano, and Claudio Detotto (2012). The Effect of Tourism on Crime in Italy: A Dynamic Panel Approach. Economics Discussion Papers, No 2012-4, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2012-4

Assessment



Comments and Questions


Bryan C. McCannon - Referee Report 1
January 30, 2012 - 09:15

see attached file


Biagi, Brandano, Detotto - Reply to Referee Report 1
May 02, 2012 - 09:09

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Sunil Sapra - Comments on Methodology
February 01, 2012 - 22:21

I want to offer the following comments on this interesting paper.

1. The authors have conducted Hansen’s J-test for instrument validity. Nevertheless, a Hausman test for endogeneity of tourism will be useful in deciding if IV estimation is actually needed notwithstanding the strong intuition behind endogeneity of tourism ...[more]

... .

2. The authors use yearly average of arrivals per group to instrument the tourism variable. Question: Is average arrivals per group a strong or a weak instrument for tourism? If it turns out to be a weak instrument, the instrumental variable and the GMM estimators can be severely biased even in large samples and their distributions are not asymptotically normal. This could lead to confidence intervals with incorrect coverage probabilities and incorrect test size. A test for weak instruments, such as Cragg-Donald test can be conducted.

3. If the instruments are weak, limited information maximum likelihood (LIML) is an attractive alternative to IV estimation in that it provides finite sample bias reduction.

Reference

Cragg, J. G. and S. G. Donald (1993) “Testing Identifiability and Specification in Instrumental Variable Models”, Econometric Theory, 9, 222-240


Biagi, Brandano, Detotto - Reply to Comments by Sunil Sapra
May 02, 2012 - 08:55

see attached file


Anonymous - positive evaluation
February 09, 2012 - 11:02

The paper analyzes a topic which is both socially and economically important for tourism sector: the tourism led criminality. The research is detailed (the literature review and references too) and carried on with good analytical and statistical capabilities. Authors properly develop a panel model rather than a cross-section one. In ...[more]

... particular, the theoretical and empirical idea of distinguishing the effect of criminality on tourists and residents is a considerable one. This new idea is interesting from both a statistical and a conceptual point of view. The conclusions are interesting too. My evaluation is therefore positive.
Regarding the structure of the paper, I suggest to eliminate the first part of the Introduction, because it is definitely a standard and useless part for an advanced tourism research, like this one. The Introduction could instead begin directly with the words “Why should crime …”. Finally, it is not clear to me how equation (5) has been obtained by substituting equation (4) in (3): I did not understand at all the mathematical computation.


Biagi, Brandano, Detotto - Reply to Reader Comment
May 02, 2012 - 09:12

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Daniele Siena - Invited Reader Comment
February 28, 2012 - 09:15

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Biagi, Brandano, Detotto - Reply to Comment by Daniele Siena
May 02, 2012 - 09:00

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Anonymous - Referee Report 2
February 28, 2012 - 09:16

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Biagi, Brandano, Detotto - Reply to Referee Report 2
May 02, 2012 - 09:10

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Anonymous - Invited Reader Comment
March 06, 2012 - 08:41

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Biagi, Brandano, Detotto - Reply to Reader Comment
May 02, 2012 - 09:14

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Anonymous - Invited Reader Comment
March 09, 2012 - 12:08

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Biagi, Brandano, Detotto - Reply to Reader Comment
May 02, 2012 - 09:14

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Biagi, Brandano, Detotto - Revised Version
May 02, 2012 - 09:16

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