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EFFECTS OF SOCIO-ECONOMIC FACTORS ON THE CRIME RATE

IN PHILIPPINES, 1991-2022

ECO, CHRISTOPHER CHUBS D.

JIMENEZ, JERICO P.
NATANAUAN, KIER JOHN B.
ROSALES, WAULTCHEU A.

A thesis proposal submitted to the faculty of the Department of Economics,

College of Economics, Management, and Development Studies, Cavite State
University, Indang, Cavite, in partial fulfillment of the requirements for the degree of
Bachelor of Science in Economics with Contribution No.________________ under the
supervision of Prof. Sherrie Rhose M. Rupido

INTRODUCTION

Crime is a behavior, either by act or omission, defined by statutory or

common law as deserving of punishment or penalty. Although most crimes require

the element of intent, certain minor crimes may be committed based on strict liability

even if the defendant had no specific mindset with regard to the criminal action. For

instance, parking violations are crimes that usually do not require prosecutors to

establish intent (Wex, 2022). Crime is one of the problems governments all over the

world have been confronted with as many innocent people have been maimed and

killed due to the activities of criminals around the world. Crime constitutes a major

human security problem confronting humanity across the world (Ukoji and Okolie-

Osemene, 2016). According to Tretter (2013) and Ayodele and Adeyinka (2014),

criminal activities around the world can be experienced in the forms of armed

robbery, kidnapping, banditry, drug trafficking, traffic offence, rape, murder, drugs

abuse, corruption, assault and stalking among others. The inability of security

agencies to effectively combat the aforementioned crimes has adversely retarded

growth and development in most of the countries around the world (Osawe, 2015).

Ratcliffe (2014), states that crime is not uniformly distributed across space and it

abounds in every country, however, the degree of crime varies from society to society
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as no society is completely immune from crime. The activities of criminals can be

manifested especially robbery which has become a major source of apprehension to

mankind (World Bank Group, 2020).

Criminality is presented as a historical social phenomenon, which does not

rule out from a person’s life, but it keeps pace with the social and technological

evolution. It has the tension to readjust all the time and as a result, a large variety of

criminal activities is shown worldwide during different time periods. Lately, types of

organized, violent and profiteering crime appear to be the most prevalent, but without

ruling out the different kinds of single crimes. Moreover, the criminal’s character

becomes even more unscrupulous and provocative, thus more dangerous towards

the rest of the people. In recent years, the two most discussed economic and

socioeconomic issues have been crime and unemployment. There has recently been

increased worry about the gradually increasing tendencies of violent crime.

In the Philippines, the Revised Penal Code (Republic Act No. 3815) serves as

the basic law that defines criminal offenses and provides the penalties for the

commission of such. Understanding the causes of crimes can help explain why they

happen and provide insight into how to address and prevent them. Various criminal

theories try to explain what leads someone to a life of crime. The Philippines has one

of the highest per capita imprisonment rates in the world (The Borgen Project, n.d.).

Crime rates were particularly high in poorer neighborhoods and places with a higher

population and unemployment. Crime is a major issue for all Filipinos, especially

those living in the country's largest cities (Sanidad-Leones, 2016). Due to increased

crime rates, the police face the difficult task of maintaining security and order.

Crime rates vary greatly throughout historical periods and locations for a

variety of causes that social scientists investigate. On average, people who have

been convicted of a crime score nearly two-thirds of a standard deviation unit worse

than the general population on mental ability tests Hirschi & Hindelang, n.d; Wilson &
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Herrnstein). Salim (2015) noted that various variables like population density;

unemployment rate; individual and societal health; inflation rate and political

considerations are related to and have influence on crime. The appropriate steps for

a notable decrease and a successful preventive of crime rates has emerged as a

major concern for all nations, as criminal activity can take many various forms and

occur anywhere, at any time. Although there are no set reasons why crimes are

committed, there are always a variety of motivations behind them. In actuality, a

person may be motivated to engage in criminal activity by a variety of factors

because every nation has unique socioeconomic and political circumstances.

The chosen locale for this study is the Philippines as for the reason that the

Philippines has one of the highest per capita imprisonment rates in the world (The

Borgen Project, n.d.). The Philippines has a moderately high rate of crime, violence,

and terrorism. According to World Bank, in 2021, the country was on the bottom five

of the order and security index ranking across the region. Equally, the Philippines was

among those with the highest imprisonment rate in every hundred thousand

inhabitants. Crime rates were notably high in poorer neighborhoods and areas

with a higher population and unemployment. Crime is a major issue for all Filipinos,

particularly those who live in the country's bigger cities. Due to increased crime rates,

the police face the difficult task of maintaining security and order. A recent study

also discovered that the country has the highest rate of premeditated homicide in

Asia (Sanidad-Leones, 2016). Hence, the purpose of this study is to analyze the

effects of socio-economic factors on the crime rate in the Philippines, 1991-2022.

Expertise in determining criminal attitudes is necessary for understanding the

underlying causes of crime. Individual perception of environment, importance of

meeting demands, education level, and ability to discriminate between legal and

unlawful means are all factors to consider.

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Statement of the Problem

The study will determine the effects of socio-economic factors on the crime

rate in the Philippines, 1991-2022.

Specifically, it sought to answer the following questions:

1. What are the trends and patterns of crime rate in the Philippines from

1991 to 2022?

2. What are the trends and patterns of the following socio-economic factors

affecting crime rates in the Philippines?

a. Population density;

b. Education;

c. Inflation rate;

d. Unemployment rate;

e. Income.

3. What are the significant effects of the socio-economic factors on the

crime rates in the Philippines:

4. What policies have been implemented to help reduce the crime rate in the

Philippines?

Objectives of the Study

Generally, this study aims to know the Effects of Socio-economic Factors on

the Crime Rate in Philippines for the years 1991-2022.

Specifically it aims to determine the following:

1. To analyze the trend and patterns of crime rate.

2. To analyze the trend and patterns of socio-economic factors affecting

crime rates such as:

a. Population density;
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b. Education;

c. Inflation rate;

d. Unemployment rate;

e. Income.

3. To analyze the effects of the socio-economic factors on the crime rates in

the Philippines:

4. To assess policies to help in reducing crime rate in the Philippines.

Theoretical Framework

Strain Theory

Strain theory, in sociology, proposal that pressure derived from social factors,

such as lack of income, unemployment, or lack of quality education, drives

individuals to commit crime. The ideas underlying strain theory were first advanced

in the 1930s by American sociologist Robert K. Merton, whose work on the subject

became especially influential in the 1950s. Other researchers set forth similar ideas,

including American criminologist Albert Cohen and American sociologists Richard

Cloward and Lloyd Ohlin.

Classic strain theories focused primarily on disadvantaged groups, wherein

common aspirations (e.g., realizing the “American dream”) and the inability to

achieve those goals was considered a driving factor behind crime. Individuals whose

incomes placed them below the poverty threshold, for example, were unable to

realize common, socially accepted ambitions through legal means, and thus they

were forced down a path of criminal behaviour to achieve their goals. Those theories

later were reformulated, most prominently by American criminologists Robert Agnew

and Steven F. Messner and Richard Rosenfeld.

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The result of Agnew’s work was general strain theory, which addressed

weaknesses in earlier strain theories, including inadequate explanations for middle-

class delinquency and inconsistencies between aspirations and expectations for

fulfilling them. Key components of general strain theory included its consideration for

the role of emotion in strain-derived crime and its consideration of a broad range of

possible sources of societal pressure that might cause a person to commit crime.

Social Disorganization Theory

Social disorganization theory states that crime rates are constant in areas

with certain environmental conditions, such as high unemployment, population

fluctuation or material decay. This theory is a macro-level theory explaining structural

processes that account for variances in crime rates across different communities.

Shaw and McKay (1942) are attributed with the development of social

disorganization theory through their research showing that rates of delinquency

decreased as distance from the inner city increased. Their research also illuminated

certain shared characteristics of places with concentrated delinquency, such as

physical decay, poor housing, broken homes, illegitimate births, and heterogeneous

populations-a group of characteristics termed social disorganization.

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Subsequent theorization has revised social disorganization, leading to the

idea of a concentrated disadvantage whereby a combination of negative structural

factors, such as percent below poverty line, percent unemployed and high residential

turnover, lead to an overall negative outcome that can put individuals at a higher risk

of crime. For example, Gramsick and Bursik (1993) and Sampson et al. (1997, 1999)

further developed theories of systemic social disorganization, which emphasize

communal ties and shared values as being an important factor in predicting stability

within neighborhoods. Finally, Sampson show how mutual trust and community

solidarity, or collective efficacy, is an important factor in determining neighborhood

crime rates. Social disorganization theory has become so greatly imbedded in

criminological explanations that even individual-level studies acknowledge the

importance of living in socially disorganized areas. For example, in their research

empirically investigating Gottfredson and Hirschi's concept of self-control theory,

Grasmick and his colleagues emphasize the importance of social disorganization in

creating more opportunities to engage in crime.

Conceptual Framework

The conceptual framework of this study centers on the dynamic interactions

between significant socioeconomic factors and crime rate. The central emphasis of

this analysis is directed towards five principal indicators of socioeconomic factors:

population density, education, inflation rate, unemployment rate, and income. This

study aims to analyze the Effects of Socio-economic Factors on the Crime Rate in

Philippines for the years 1991-2022.

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Socio-economic Factors

 Population density

 Education
Crime rate
 Inflation rate

 Unemployment rate

 Income

Figure 3: Conceptual Framework

Significance of the Study

This particular study deemed beneficial to the following:

Policy Makers. Understanding how socioeconomic characteristics affect

crime rates might help policymakers build targeted and successful crime prevention

programs.

Informed policymaking can result in the allocation of resources to areas in most

need, thereby tackling the core causes of crime.

Philippine National Police. This study will help the PNP as it will give them

information and better understanding about how different independent variables

involved in this research affects the crime rate in the Philippines. Identifying the

socioeconomic factors that contribute to crime might help police forces create more

proactive, community-focused policing tactics.

The Public. The study can benefit the general public by increasing their
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awareness of the socioeconomic factors that influence crime, empowering people

and communities to actively participate in crime prevention efforts. The general

population can become better-informed advocates for laws and programs that

address the underlying causes of crime.

Future Researchers. This study aims to benefit future researchers who will be

interested in this topic and use it as a reference to broaden the scope of the study.

Time and Place of the Study

The study "Effects of Socio-economic Factors on the Crime Rate in the

Philippines" will be conducted in the Philippines from July 2023 to May 2024. This

time frame will be optimally utilized for the systematic collection of data of the socio-

economic factors such as: Population density, Education, inflation rate,

unemployment rate, and income and crime rate in the Philippines.

Scope and Limitations of the Study

This study primarily focuses on the effects of socio-economic factors on the

crime rate in the Philippines. The data collection shall be limited to the socio-

economic factors such as: population density, education, inflation rate,

unemployment rate, and income and crime rate in the Philippines. The researchers

will intend to employ secondary data sources for their investigation, specifically

obtaining data from reputable platforms such as MacroTrends, Worldbank, and

Electronic Freedom of Information (EFOI) from the year 1991 to 2022. Emphasis will

be placed on utilizing secondary sources as the primary source of data for this study.

The Republic Act 6975, officially known as "An Act Establishing the Philippine

National Police under a reorganized Department of the Interior and Local

Government, and for other purposes," was passed in 1990 therefore that is when the

researchers will begin using that year's data. With the implementation of this law, the
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national police and the former Philippine constabulary were united to produce a new

law enforcement body with a civilian focus and a national reach. Prior to these

legislation, the Philippine Constabulary was renamed Philippine National Police in

1991. This will allow researchers to study pertinent data, such as historical trends

and current conditions. More likely, this will assist researchers in gathering evidence

and information on crime rates.

Definition of Terms

Crime rate – The amount of crimes committed in a specific location during a

period of time. Crime rates are a measure of the change in recorded crime over time.

They are based on official crime or offender statistics.

Education – Education represents the number of students enrolled in the

primary, secondary, and tertiary level in the Philippines.

Imprisonment - is the restraint of a person's liberty against their will.

Income – Income refers to the money or financial gains earned by an

individual or entity over a specific period, typically through various sources such as

employment, investments, business activities, or other forms of economic

participation.

Inflation rate - Inflation refers to an overall increase in the Consumer Price

Index (CPI), which is a weighted average of prices for different goods. The set of

goods that make up the index depends on which are considered representative of a

common consumption basket. Therefore, depending on the country and the

consumption habits of the majority of the population, the index will comprise

different goods.

Population Density - Population density is midyear population divided by land

area in square kilometers. This ratio can be calculated for any territorial unit for any

point in time, depending on the source of the population data.

Socio-economic factors – are factors which includes: population density,

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Income, education, unemployment rate and inflation rate.

Unemployment rate - The unemployment rate represents the number of

unemployed people as a percentage of the labor force (the labor force is the sum of

the employed and unemployed).

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REVIEW OF RELATED LITERATURE

The purpose of this chapter is to increase understanding of the effects of

socioeconomic factors on crime rate in the Philippines. By conducting this review,

the researchers seek to gain a better understanding of the socioeconomic factors

that influence the crime rate in the Philippines.

Crime is one of the most disturbing social problems in the country, affecting

public safety, children’s development, and adult socioeconomic status. Crime

remains a widespread issue that has a variety of economic, social, and political

consequences in societies around the world. Aside from creating uncertainty, crime

makes economic activities inefficient since resources must be transferred from

productive activities to crime reduction and prevention (Ahmad et al. 2014). Criminal

activities, defined as actions that violate legal norms and are subject to legal

penalties due to their perceived harm or wrongfulness in the eyes of society,

manifest in diverse forms and exhibit significant variations on a global scale. The

nature and extent of criminal behaviors differ across regions, reflecting the complex

interplay of cultural, social, economic, and political factors that shape the fabric of

societies worldwide (Akopan, 2019). Crime is an offense against a society's set of

values. It is typically thought of as the result of several different circumstances,

including family, societal, cultural, and economic ones. Crime is an injustice that

harms not only a single person but also a group of people, society, or the state.

Crimes inevitably cause discomfort and distortions in any community, which makes

members of that society feel uneasy.

Crime has existed for a long time, and there is no question that crime is on

the rise both globally and in the Philippines. Crime is a serious concern for all

inhabitants of the Philippines, due to increased crime rates, the police confront the

challenging burden of preserving security and order. Statistics appear to support the

theory that socioeconomic factors and crime rates are strongly correlated. In
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accordance with the economic theory of crime, a person will be more inclined to

commit a crime if they anticipate making more money from it than they would by

engaging in its legal equivalent (Pieszko, 2016). Crime occurs in numerous forms in

the Philippines and is a severe problem throughout the country. The Philippines has a

fairly high crime rate. Police blamed the country's continuous crime problems on a

range of social, economic, and cultural factors.

Socio-economic Factors

Crime rates are shaped by an intricate interplay of various elements, with

socioeconomic factors playing a pivotal role. The impact of socioeconomic factors

on crime rates is profound, and comprehending this intricate relationship is vital for

the development of effective strategies aimed at preventing crime by addressing its

underlying causes.

Numerous theories offer insights into the connection between

socioeconomic factors and crime rates. Strain theory, for instance, posits that

individuals undergo strain when they are unable to attain socially endorsed objectives,

such as financial success or social advancement. Faced with limited opportunities

for legitimate achievement, some individuals may resort to engaging in criminal

activities as an alternative means of reaching their goals. On the other hand, social

disorganization theory suggests that elevated levels of poverty, residential instability,

and community disarray contribute to increased crime rates. Communities

characterized by limited resources, weak social networks, and a deficiency in both

formal and informal social control mechanisms are more prone to experiencing

elevated crime rates. Understanding these theories aids in forming a comprehensive

perspective on the intricate relationship between socioeconomic factors and crime

rates, ultimately facilitating the development of targeted and effective crime

prevention strategies (Vargas, 2023).

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Inflation rate

According to Curtis and Ralston (2014) and Tang and Lean (2015), several

studies have observed the crucial effect of inflation on crime they find that inflation

reduces the purchasing power and increases the cost of living. Hence, crime rate

may increase when an individual is unable to maintain their standard of living as

before. Moreover, Tang and Lean (2015) added that this is not an immediate

phenomenon because it takes time for inflation to gradually ‘reduce’ the purchasing

power. The study implied that inflation and unemployment are two important criminal

motivation factors in many countries such as Malaysia.

Inflation is believed to be able to cause economic adversity and would encourage

criminal activity. Becker explained that improvements in legitimate labor market

opportunities caused by improvement in a nation’s economy makes crime relatively

less attractive. These results clearly supported the opinion of economic conditions

related to the economic cycles; such as employment opportunities and salaries in

legal activities, having a strong effect on crime.

Some researchers reported that inflation rate played a crucial role in criminal acts. It

is found that the inflation rate was positively correlated with crime rate. Assuming

the wages are constant, rise of inflation rate will reduce a person’s purchasing power

and the cost of living will be relatively higher than before. As a result, crime rate may

increase because an individual is unable to maintain his/her standard of living as

before. In other words an individual is likely to engage in criminal activities to

maintain or/and improve his/her purchasing power. However, this phenomenon does

not happen immediately because it takes time for inflation to gradually reduce the

purchasing power (Tang and Lean, n.d).

Moving towards inflation, it cannot be dismissed that any increase in general

price level would result in a decrease in purchasing power; thus, creating strain which

in turn would propel people to commit crime.

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Unemployment

The article made by Vargas (2023), informs that another important

socioeconomic issue connected to crime is unemployment. Financial burden leads to

fewer access points to resources, and a decline in social integration are all

consequences of unemployment. People without jobs may be more likely to commit

crimes because they don't have a sense of purpose or identity related to their line of

work, they don't have any social support, and they lack social networks. Added to that,

as (Piezko, 2016) demonstrates, a bad economic climate can lead to an increase in

crime through unemployment. It should be remembered that while unemployment is

inherently linked to the economy, it can also have other factors. They differentiate it

using four terms: frictional, long-term, cyclical, and structural unemployment.

Additionally, a study of police data reveals that, rather than violence, unemployment

causes more crimes against property, with those under thirty years old having the

highest intensity of crime. However, it should be highlighted that an increase in

unemployment might have varying effects on specific socioeconomic groups, either

by raising or lowering their level of criminal activity.

According to Ajimotokin et. al (2015), consistent with the notions of criminal

motivational effect, they find that the effect of unemployment on crime rates in

Malaysia is positive and statistically significant at 5 per cent level. Unemployment is

one of the most popular variables that are normally thought to be closely related with

the occurrence of crime. Losing a source of income, would induce strain, would act

as a catalyst to drive people towards crime, where primarily is to sustain their lives.

On the other hand, for those who are used to living in the fast lane, crime would be an

attractive choice in sustaining their high standard of living. Their investigation led to

the relatively simple premise that there is a positive association between

unemployment and the crime rate. Put differently, people are motivated to engage in

illicit activities because the relative gain from doing so outweighs the loss of income

that results from unemployment. The second socioeconomic problems of recent

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times is unemployment. Therefore, whether using data from a single country or

having performed analyses on cross-country data or state-level observations, several

studies confirm that unemployment increases crime.

Income

According to Grogger and Meghir (2015), a number of studies demonstrate

that there are three ways in which variations in income might impact crime. Firstly, a

decrease in income can increase the desire for returns from criminal activity. Put in

another context, a decrease in low-wage workers' income is correlated with an

increase in crime. Second, since there are more opportunities for criminal offenses

due to the high volume of stolen products, a gain in revenue does. Lastly, a rise in

income encourages outdoor activities, which raises the possibility of becoming a

victim of crime.

Niknami (2013) investigates the impact of income on criminal conduct,

utilizing comprehensive individual-level conviction data sourced from diverse

Swedish registers. The findings of the study indicate that differences in relative

income have a positive correlation with the likelihood of engaging in criminal

activities. This aligns with sociological theories that posit a connection between

lower income levels and increased criminal behavior. The study reveals that income

influences both the likelihood of receiving a prison sentence and involvement in drug-

related offenses. In summary, the outcomes suggest an observable influence of

income on criminal behavior. The researcher conducted a series of robustness

checks on the data to ensure the credibility of the findings, revealing that the results

are not driven by reverse causation or omitted variable bias.

A decrease in income not only increases the relative costs of engaging in

legal activities but also increases the likelihood to commit crimes. A thorough

analysis carried out in 2014 by Machin and Meghir comes to the conclusion that

income has a significant impact on crime rates. Yildiz (2013) elaborates on this

viewpoint in more detail, clarifying that the influence of income on crime is not
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limited to specific situations but rather occurs on a worldwide level. According to the

study, an increase in income is associated with a decrease in crime, while a decrease

in income is associated with an increase in criminal activity. This complex

relationship between economic conditions and criminal activity highlights the

complex variables that influence social cohesion and international law.

Previous research has empirically demonstrated that the level of income

plays a significant role in influencing crime rates across various countries, as

indicated by Hauchner et al. in 2013. More specifically, in European countries, a study

that focused on the eastern and northern areas found a strong association between

lower income levels and higher rates of criminal activity. This emphasizes

the relationship that exists between socioeconomic variables, including income, and

the incidence of crime in various geographic areas, underscoring the necessity for

thorough comprehension and focused actions in order to address these societal

concerns.

Population density

The connection between crime and city size is not a new fact. Social

observers have long argued that there exists a connection between cities and

immoral behavior. According to Hovel (2014), the models indicate that population

density has a negative and significant relationship with crime rates. Residential

stability appears to be an important factor in crime reduction based on the evidence

from the vacancy rates, percent of recent movers, and rental rate results. It should be

noted, however, that the vacancy rate might be endogenous with the crime rates.

According to a study, while unemployment is only effective in increasing crimes of

damaging property, it was determined that the total number of crimes against

property, theft, and purse-snatching, pickpocketing, and fraud were significantly

higher in provinces with a higher population subject to compulsory social insurance

and relatively higher welfare level than other provinces.

The concentration of population has also played a role in the development of

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criminal behavior. Crime is prevalent in areas with a high population density. Extra

commercial events entice criminals to commit crimes because they provide

additional beating rooms. Industrialization may also contribute to an increase in

crime rates and vigilance in metropolitan environments.

Education

Lack of education frequently raises a person's risk of engaging in criminal

activity and antisocial behavior. On the other hand, it is also thought to be true that a

person's chances of leading a life free from crime rise with education. There is

unquestionably a link between greater rates of violent crime and the proportion of

people who complete high school or other post-secondary education, as shown by

FBI crime figures and US Census Bureau records. Compared to states (like

Minnesota) where educational attainment is higher and violent crime is lower,

California ranks among the ten states with the lowest levels of education and has a

higher rate of violent crime (Bernard, 2022). Education and crime have an inverse

causal relationship that the more education one has received, the less likely one will

be to engage in criminal activity.

In a recent study in Sweden, Hjalmarsson et al. (2013) use a reform in the 1950s,

which extended compulsory schooling from 7 to 9 years but was implemented at

different times in different regions, to estimate a causal educational effect on crime.

They show that one additional year of schooling consistently decreases the

probability of conviction and incarceration. The underlying concept is that continuing

to tertiary education is a way of escaping youth inactivity and idleness and, since

youth inactivity is known to trigger crime, the voluntary attendance effect of tertiary

education decreases the individual’s probability of committing crime. However,

young people with a high probability of deviant behavior are also likely to have poor

upper-secondary school grades and may therefore lack tertiary education eligibility.

Thus young people with the largest potential benefit from escaping a criminogenic
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setting through tertiary education often lack the main tool, tertiary eligibility. Hence, it

is relevant to investigate whether an increased tertiary education eligibility rate

decreases crime rates.

Crime policy in the Philippines

According to the Philippine Development Plan (2017), national security and

public order are critical components in laying the foundation for sustainable

development, a trustworthy and resilient society, and a globally competitive

knowledge economy. People feel safe wherever they are in the country and are free

to do their business, economic, or social activities if they do not violate the economic,

social, or cultural rights of others. Such a circumstance allows for the free flow of

goods and services. As a result, peace, security, public order, and safety are central

to the administration's 0–10-point socioeconomic agenda.

The Philippine government has structured and developed institutions to ensure

peace and order. These institutions oversee preventing crimes, enforcing laws, and

apprehending and prosecuting individuals who break the law (Department of Justice

2014).

According to the Philippine National Police, they will increase their efforts to

reduce all forms of criminality through law enforcement and anti-crime, intelligence,

case recording, and tracking, detection and investigation services, case filing and

arrest, capacity building, operational readiness, and disaster and emergency

response. Police community partnerships will be formed, supplemented by

information and education initiatives, as well as community organization and

mobilization, to prevent and combat crime and lawlessness. To ensure peace and

order, the Philippine National Police will increase its police presence and

professionalism. Patrolling will continue to be the foundation of policing and the

means of establishing and maintaining police presence in barangays. These

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interventions, all carried out in collaboration with the community, include strategically

positioned checkpoints, foot and mobile patrols, and targeted and intelligence-driven

operations against the most wanted individuals and members of criminal gangs.

The policies under criminal law will help the country to reduce crimes.

Criminal law is a complex and fundamental component of every legal system, and it

is essential to upholding societal justice and order. When confronted with criminal

accusations or meetings with law enforcement, people frequently question their

rights and protections. Understanding the fundamental principles of criminal law in

the Philippines is critical for individuals seeking to protect their rights and ensure a

fair legal procedure. The goal of criminal law is to provide society with a set of rules

governing legal and illegal activity. In other words, criminal law specifies which

activities and behaviors are permitted. It outlines what activities constitute crimes

and how to punish people who do them.

Synthesis

The relationship between crime rates and various socioeconomic factors is

intricate and multifaceted. Socioeconomic conditions play a pivotal role in shaping

crime rates, with significant implications for the development of effective crime

prevention strategies. Strain theory posits that individuals resort to criminal activities

when faced with limited opportunities for legitimate success, such as financial

achievements. Social disorganization theory suggests that communities

characterized by poverty, residential instability, and a lack of social control

mechanisms are more prone to higher crime rates. Inflation, as noted by Curtis and

Ralston (2014) and Tang and Lean (2015), can influence crime by reducing

purchasing power and increasing the cost of living. Unemployment is another crucial

socioeconomic factor linked to crime, with financial strain, a lack of social support,

and identity issues contributing to criminal behavior. Income disparities also have a

notable impact on criminal conduct, as highlighted by Niknami's (2013) study, which

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found a positive correlation between relative income differences and the likelihood of

engaging in criminal activities. Machin and Meghir comes to the conclusion that

income has a significant impact on crime rates. Yildiz (2013) elaborates on this

viewpoint in more detail, clarifying that the influence of income on crime is not

limited to specific situations but rather occurs on a worldwide level. Population

density and education are additional factors influencing crime rates, with higher

population concentrations and lower educational attainment associated with

increased criminal activity. Understanding these complex relationships is essential

for crafting targeted and effective crime prevention strategies that address the root

causes of criminal behavior. The Philippine Development Plan emphasizes national

security and public order for sustainable development, a resilient society, and a

globally competitive knowledge economy. The government has established

institutions to prevent crimes and enforce laws. The Philippine National Police will

increase efforts to reduce criminality through law enforcement, intelligence, and

community partnerships. Criminal law policies will help reduce crimes and uphold

societal justice.
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METHODOLOGY

This chapter presents the research design, hypothesis, sources of data, and

statistical treatment used to analyze the data of the study. It provides a broader

understanding of the processes that were involved in arriving to the results of the

study.

Research Design

The present study is a quantitative research design that will employ a

descriptive and causal-explanatory method of research, to analyze the effects of the

population density, inflation rate, income, education and unemployment rate on the

crime rate in the Philippines. The descriptive method of research collects

quantifiable data to statistically assess a population sample; these numbers could

indicate patterns, linkages, and trends across time. Causal-explanatory study

determines the cause-and-effect relationship among variables. It delves into the

effect of one variable on another and seeks to explain why certain results happen.

The data collection will be based on the data from reliable sources that will be

used to accumulate accurate information pertaining to the objectives of the study.

Hypothesis of the Study

The central focus of this study is to analyze the Effects of Socio-economic

Factors on the Crime Rate in Philippines for the years 1991-2022.

The following hypotheses will be tested in this study:

Null Hypothesis H0: The socio-economic factors, including Population density,

Education, inflation rate, unemployment rate, and income have no significant effects

on the crime rate in the Philippines.

 23

Sources of Data

The requisite data for this study will be derived from the data gathered from

the websites of Macrotrends, World Bank, and Electric Freedom of Information (EFOI)

by the researchers covering a time series data from 1991 to 2022, a period of thirty-

one (31) years. The Macrotrends website strives to provide immediate access to

certain data charts, articles, or resources. The EFOI website's DIDM section publishes

quarterly and annual crime data reports broken down by region, province, and any

kind of crime. They also possess Open Data Portal, which also makes PNP crime

data available to researchers and the general public in machine-readable formats.

The World Bank Data Portal offers access to worldwide economic and social

statistics such as World Development Indicators, International Debt Statistics,

Millennium Development Indicators, and information on poverty, education, and

gender. Secondary data will be employed, sourced directly from the data that the

researchers will collect from the aforementioned reliable sources.

Econometric Model

The model presented below will be used to analyze the effect of

socioeconomic factors such as inflation rate, population density, education, Income

and unemployment rate on the crime rate in the Philippines.

CR = β₀ + β1IR + β2 PD + β3E + β4I+ β5UR + μ

Where:
CR = Crime rate
IR = Inflation rate
PD = Population density
E = Education
I = Income
UR = Unemployment rate
 24

Statistical Treatment

The following statistical methods will be employed for the analyzation of data

and interpretation of the results:

Autoregressive Distributed Lag (ARDL )

The study will use Autoregressive Distributed Lag (ARDL) technique proposed

by Pesaranet al. (2001). The technique uses autoregressive models along with

distributed lag. It addresses autocorrelation and endogeneity issues, resulting in fair

and effective calculated parameters.

ARDL Bounds Tests for Cointegration

Considering the idea of the data, and the need to break down the connections

and effects of the variables, the autoregressive distributed lag (ARDL) cointegration

strategy is considered as the best model. This ARDL cointegration approach was

created by Pesaran and Shin (1999) and Pesaran et al. (2001). It has three points of

interest in comparison with different past and conventional cointegration techniques.

Unit Roots Tests

To enable the researchers to determine the stability of the data under review,

Augmented Dickey Fuller (ADF) tests will be used to signify the stationarity of the

data. The test provides a p-value, and it is less than a specific level of significance,

the ADF test is especially effective for examining the long-term behavior of a time

series, helping in the selection of suitable models for time-dependent data.

The Durbin Watson Test

It measures autocorrelation (also called serial correlation) in residuals from

regression analysis. Autocorrelation is the similarity of a time series over successive

time intervals. It can lead to underestimates of the standard error and can cause you
 25

to think predictors are significant when they are not.

The test statistic is calculated with the following formula:

Where Et are residuals from an ordinary least squares regression.

The Durbin Watson test reports a test statistic, with a value from 0 to 4, where:

 2 is no autocorrelation.

 0 to <2 is positive autocorrelation (common in time series data).

 >2 to 4 is negative autocorrelation (less common in time series data).

Measure of Goodness Fit

R-Squared.

This statistical measure, also known as the coefficient of determination, is

employed in regression models to determine the extent to which the independent

variable accounts for the variation in the dependent variable. Stated differently,

the goodness of fit, or r-squared, indicates how well the data fit the regression

model. It represents a value in the range of 0.0 to 1.0, where 1.0 denotes an ideal

fit and 0.0 denotes a calculation that was not successful.

Adjusted R-Squared.

An alternative version of R-squared that accounts for non-significant variables

in a regression model is called adjusted R-squared. Put differently, the adjusted R

-squared shows whether or not a regression model is improved by including more

factors. R-Square is a bad option for measuring MR fitness because of the

abundance of independent variables. Because even in cases where there is no

discernible relationship between the dependent and independent variables, the R-

 26

Square will tend to increase as the number of independent variables increases

(Corporate Finance Institute, 2022).

Test for Normality

In order to ascertain if the population from which a sample of data was

taken was normally distributed, Velasco (2022) states that a normality test is

utilized. The majority of the time, the goal is to ascertain whether the research's

data are distributed normally or not. To investigate, the researchers will use

graphical and analytical methods, such as the Shapiro-Wilk test, P-P plot, and Q-Q

probability plot. According to Almadin, Antiporda, and Suin (2022), the simplest

way to tell if a distribution is normal is to use the histogram. Normality is

presumed if the graph shows a bell-shaped distribution.

Jarque-Bera Test

It validates the normalcy of the data. This kind of normality test is employed

in conjunction with other statistical tests. If the value is zero, it means that the

data were spread normally.

Test for Heteroskedasticity

The white test is used in regression analysis to detect heteroscedastic

errors. The null hypothesis of this test suggests that there is no detectable

heteroscedasticity in the model. For the null hypothesis to be accepted based on

stronger evidence, the p-value of the f-statistic must be greater than 0.05

(Almadin, Antiporda, & Suin., 2022).

 27

Test for Specification errors

The most common cause of specification errors is leaving out an important

explanatory variable because there is insufficient information available for it, an

unnecessary explanatory variable was included, or the functional form of the model

was erroneous. The null hypothesis, which claims that some model variables are not

significant, cannot be rejected by the Ramsey RESET test until the f-statistic's p-value

is larger than 0.05.

Test for Multicollinearity

The connection between multicollinearity and the independent variables in the

model is linear. This implies that the model is skewed as a result of the

untrustworthy hypothesis tests used in the regression estimation, which raises the

possibility that the coefficients were misinterpreted. The total of all centered

Variance Inflation Factors (VIF) must be less than ten in order to determine that there

is no multicollinearity in the model (Almadin, Antiporda, & Suin., 2022).

 28

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