Violent crime in the U.S.: The interaction effect of relative and absolute deprivation

Abstract

A substantial body of research links poverty and income inequality to higher crime rates, particularly violent crime. While prior studies have examined these relationships independently, few have explored their potential interaction. Drawing on established theories of absolute and relative deprivation, it is hypothesized that there is an interaction effect between income inequality and poverty, such that the impact of income inequality on violent crime becomes stronger as poverty levels rise. In other words, the interaction effect suggests that as the gap between the "haves" and the "have nots" widens - both in relative and absolute terms - those in the economically disadvantaged group likely experience more intense frustration, thus increasing the likelihood of violent responses. Using U.S. state-level data from 2014 to 2022, the analysis reveals a significant and positive interaction effect; the influence of income inequality on violent crime becomes stronger as poverty levels rise. These findings advance the literature by highlighting the need to consider how structural conditions work together to shape crime patterns. They also suggest that crime-reduction policies should simultaneously address poverty and income inequality. Specifically, interventions that focus on income-smoothing, such as progressive taxation and expanding access to education and employment opportunities, are likely to have the most significant potential to lower violent crime rates. These targeted interventions in areas experiencing both high poverty and high inequality may be particularly effective in reducing violent crime and improving outcomes for socioeconomically marginalized populations.