POVERTY, INEQUALITY, AND CRIME
"Poverty is the normal condition of man" (Robert Heinlein)

    Poverty, or stratification by social class, was the first sociological variable ever looked into as a possible cause of crime.  Some sociologists would say religion was the first sociological variable, but the field of criminology claims a slightly different heritage.  There are two reasons why social class and poverty came to be of particular interest: (1) it was an enduring social problem in all societies across time; and (2) it was suspected that something in the causes of poverty were the same as the causes of crime.  The heart of the criminological mode of inquiry, from the start of the sociological perspective, was that deviant behavior and crime were NOT the inherent properties of individuals, but were instead the results of a series of relationships characteristic of a given society, and unfolding together with the development, or progress, of that society.  In other words, things like poverty and crime seemed like things that were here to stay, as part and parcel of any given society.  In a sense, nothing could be more sociological than that, although sociologists came to relegate that particular approach to the functionalist backwaters of their discipline.  Criminology, on the other hand, has always maintained there is a strong correlation between poverty (properly measured), social stability, and crime and delinquency.  Any textbook will highlight that fact over and over again.  Regarding social stability, the poverty-crime link has always been associated with the so-called "downfall" of various institutions other than economy.  Historically, there have been episodes of society-wide poverty due to the failures of polity, medicine, education, and justice.  Recent American thinking holds the so-called "sexual revolution" to blame; i.e., the decline in stable families.  The argument goes that, today, some sure-fire ways to achieve poverty are to: (a) not graduate high school; (b) not keep any steady job very long; and (c) not keep from having children out of wedlock.  Of these, the correlational evidence is strongest for the out-of-wedlock argument.  The poverty rate among married people who make their marriage last and "plan" their offspring is very, very low, but few members of society are willing to embrace this kind of planning, preferring instead to follow a "life chances" point of view that includes fuzzy values like trust, luck or hope, ignoring blatant facts about social class and other harsh realities.  While elaborate distinctions can be made within the "life chances" view (Dahrendorf 1969), the ultimate and inescapable penalty of poverty is a FAILURE TO CONTROL YOUR OWN DESTINY.   

    It will be helpful to review some basic facts about social class.  See the Wikipedia entry on Social Class) for more details on this topic, but basically, social class is how you speak, what you wear, what you watch on TV, the items in your living room, and what time you eat dinner.  All these things have a great deal to do with your social class, as well as what you drink.   Social class is sociology's main predictor of beliefs, behavior, life-styles and of life itself.  Sociologists see it as the process of a "class in itself" moving in the direction of a "class for itself," a collective agent that changes history rather than simply being a victim of the historical process.  In this sense, it can be associated with the notion of social movements, but as a more broadly defined set of sensibilities and attitudes, it is more accurately associated with the topic of social change.  Throughout history and in all societies, there has always been some notion that society can be divided into "high" and "low" classes.  Inequality of this sort is endemic to all societies.  The famous sociologist, Karl Marx, of course, held that this particular social division was between a "ruling class" and a working class, and it did not have to be so natural or endemic.  Regardless of that argument, it is indeed true that the study of social classes or stratification systems will yield important insights into the power structures and influence processes of a society.  Poor people are part of what Dahrendorf (1969) calls the "obey class."  They will never have power, no matter how hard a "poor people's movement" might try, and they will always be subject to the whims and deceptions of the moneyed classes. 

    By definition, a social class consists of people who share the same or similar social status, or more precisely, socio-economic status (SES), consisting of three variables: Education, Occupation, and Income.  When sociologists speak of "class" they are usually referring to economically based classes because income and wealth are the most important of these variables, although for men, occupation tends to be slightly more important.  Social mobility, or the so-called "greasy pole" by which people move up and down the status ladder is supposed to work (in egalitarian fashion) by making Education the most important thing first, then applying it to Occupation, which theoretically, at least, results in Wealth or Income.  Class awareness is simply recognizing that certain attitudes and beliefs are associated with classes, but once one is aware, one is free to accept or deny the validity of those promises.  And promises they are, referred to by criminologists as either aspirations (hopes and dreams) or expectations (likely prospects).  Both class and race are contexts in which one's life is played out, and race sometimes becomes the more powerful of the two at times.  Race is difficult to get away from, but so is social class.  Both variables, and more, play a large role in shaping peoples' destinies.  The perceived "worthiness" of an individual is often sized up by perceptions of social class, along with other SAUCER variables, representing other socio-demographic characteristics about which socio-psychological attributions are made (SAUCER = Sex, Age, Urbanity, Class, Ethnicity, and Religion).  Regionality, or what region of the country you come from might be an additional factor.  Within every society, the social stratification system exists to function as a kind of perceptual shorthand for channeling hate, hostility, suspicion, and distrust among the various segments of a society and thus limit or slow down the extent or pace of social integration.  For conflict theorists, nothing more completely captures the essence of societal conflict as the basis of social structure.          

    Many criminologists have evolved in their careers from being poverty researchers into becoming inequality researchers.  Poverty and inequality are not the same thing.  The classic (and possibly last) "poverty causes crime" criminologists were Guerry and Quetelet in France during the early 1800s, followed perhaps by a few Marxist-inspired criminologists in the early 1900s.  Poverty is generally distinguished as being either absolute deprivation (a rate or average across an entire population) or relative deprivation (who's worse off in terms of comparing one group with another).  Neither of these distinctions have caught hold in economics or policy studies where poverty is usually defined as the lack of some fixed level of material goods necessary for survival and minimal well-being.  For example, the government's official measure of a poverty rate only counts cash income in determining whether a family is poor.  Cash welfare programs count, but benefits from noncash programs, such as food stamps, medical care, social services, education and training, and housing are not included. Taxes paid, such as social security payroll taxes, and tax credits, such as the Earned Income Credit, are also excluded from poverty rate calculations.  Inequality, on the other hand, refers to a comparison between the material level of those who have the least in a society and the material level of other groups in that society.  Inequality is measured by such things as the Gini Index (aka the Gini coefficient), and other scales and indexes created by researchers.  Consequently, a country in which everyone is poor will have poverty but no inequality.  Likewise, a fairly well-off country can have inequality but no poverty.  Structural poverty may exist in different forms in different regions of the same country.  In the United States at least, poverty counts usually consist of four (4) indicators, as illustrated in the following chart.

     The chart at left portrays the four main anti-poverty programs. Medicaid is the largest with over 50 million Americans served.  It is a joint federal-state aid program designed to target those who are officially "poor."  Unemployment insurance is second, serving about 12 million, and there is some debate over whether it is designed to serve the poor or the underemployed. Benefits run a minimum of 26 weeks but are often extended. Food stamps are an indicator that fluctuates, and not much is known about their intent other than to keep people from going hungry.  The welfare line indicates total dependency just to stay alive.

    There are at least twenty different ways to measure poverty and inequality (e.g., unemployment, high rates of divorce, single-parent households, high population density, dilapidated housing, poor schools, residential mobility, population turnover, concentration of minorities, life expectancy, child mortality, etc.)  The problem is that all these things are highly correlated with one another.  In research, this is called the problem of multicolinearity, where all the possible causal factors are highly intercorrelated with one another.  Teasing out the effects of everything being a cause of everything else is a logic order problem in social science.  And, of course, there is the well-known fact that correlation is not causation.  Each way of measuring poverty has its criticisms.  The contextual approach -- looking at things like houses, schools, and neighborhood composition -- comes off as somewhat racist, runs counter to the Fair Housing Act of 1968, and inevitably delves into the political correctness of words like "ghetto" and "underclass."  The income approach -- looking at things like how much it takes to feed a family of four -- ignores the effects of things like Earned Income Tax Credit, Medicaid, food stamps, and housing subsidies.  The consumption approach -- which looks at things people buy, such as lottery tickets and electronic devices -- covers up the poverty rate and makes poor people on assistance programs look like wasteful spenders.

    Theoretically, the relationship between inequality and crime is believed to operate through a person's individual assessment of the equity of a particular distribution of economic resources.  Their assessment is partially shaped by the sociocultural environment, but there is no isomorphic (one-to-one) relationship between aggregate (national statistic) measures and psychological factors; this is called making the ecological fallacy.  If inequity is perceived, there must be some interpretive or intervening mechanism that channels or diffuses the effect in different directions.  In criminology, that intervening mechanism is referred to as relative deprivation, and some individuals respond by resorting to property crime to address their grievances, and other people develop a deep anger which can be manifested in violent ways. Relative deprivation is illustrated in the following quotation:

Karl Marx once said: "A house can be large or small; as long as the surrounding houses are equally small it satisfies all social demands.  But if a palace rises beside the little house, the little house shrinks into a hut."

    Not all people who perceive wage inequality resort to crime.  Some become entrepreneurs, others get involved in political action, and still others direct the feelings of anger and frustration toward themselves.  The type of crime traditionally associated with economic inequality is property crime, but this may be simply an "opportunity" explanation (since when poor people live side by side with rich people, there's more opportunity).  In recent years, however, the "deep anger" explanation has become more popular, and many criminologists now associate economic inequality with violent crime.  Perhaps the most common association is with "conventional" or street crime.  For example, when unemployment goes up 1%, there's a 4% increase in homicides, a 6% increase in robberies, a 2% increase in burglaries, and measurable effects on rape and other crimes.  Other studies, highlighted in this review by Dr. Patrick Fagan, indicate that increased levels of welfare and food stamps lead to increases in births by unwed mothers, and it is the poverty-induced process of family fragmentation which causes increased levels of crime and delinquency.

    It has been suggested that poverty produces an immediate "opportunity" effect and a lagged "motivation" effect.  People experiencing downturns in economic conditions usually don't feel the full effects until support from their family runs out, government assistance is exhausted, peak conditions exist for relative deprivation comparisons, demographic pyramids grow, etc.  Hence, some period of delay, or "lag" is expected before the effect shows up on crime rates.  Some researchers study short lags, with a one or two-year lag being typical, such as researchers looking in 1996 for the crime rate effects of a bad economic year in 1994, for example.  Other researchers study longer lag periods.  For example, if 2010 (a bad economic year) is taken as the baseline, then the "explosion" or crime wave "boom" will peak in the year 2023. 

TYPES OF INEQUALITY

ECONOMIC INEQUALITY
    Economic inequality is usually measured as income inequality, and mathematically using features of the Lorenz curve, specifically four coefficients: the Gini, Mehran, Bonferroni, and Piesch.  The Gini coefficient is the most commonly seen one in criminology, and it weights extreme outcomes in inequality; the Piesch, high incomes; and the Mehran and Bonferroni, low incomes.  The weightings are done to the tails of the distribution.  The Gini coefficient ranges from "0" (perfect equality) where everyone is fairly equal to "1" (perfect inequality) where one person has all the wealth and everyone else has none.  Gini indexes of as low as 0.10 have reached statistical significance in relationship to crime.  The U.S. average Gini is 0.45 and rising (see Wikipedia Entry on Gini coefficient).  By comparison, most other Western democracies have lower Gini indexes.

WAGE INEQUALITY
    Wage inequality overcomes some of the income reporting problems associated with using income inequality, and just counts wages instead of total family income.  One of the more troublesome things about it is the constant widening of the gap between rich and poor in terms of the distribution of income. However, there are more mundane matters to wage inequality.  For example, the ratio of a college educated worker's wages to a high school graduate's wages (a commonly seen measure) always seems to be widening, and it will always seem like more and more college degrees are needed.  Wage inequality is a global problem because, imagine if you will, the effects of a shoe-worker in China on a $5,000 a year living wage compared to a similar American worker on a $36,000 a year wage.  It is also a big gender problem, with women only earning 80% of what a man makes for the exact same job.  All sorts of groups of people who are comparable in terms of job title and qualification earn different amounts of money for the same work.  That's wage inequality, and outside of union activity (which tends to stabilize things somewhat), the whole "market" for wages or pay has less to do with actual skills or level of education and more to do with "hype" over what are the up-and-coming good-paying jobs.  Also, in point of fact, there are very real geographic and/or regional differences in cost-of-living which account for a great deal of the disparities.

    Wage inequality is often associated with the idea of "fairness" at least in terms of, once again, the gap between rich and poor, when, for example, a statistic is cited that 70% of a country's income is controlled by 20% of its citizens.  Economic fairness requires somehow taking from the rich and redistributing it to the poor, and this can only be accomplished in the short run by replacing one type of regulation (or crony capitalism) with another -- taking away one group's comparative advantage and setting up another (unfair) benefit for another.  In the long run, wage inequality can only be decreased by a long-term commitment to equitable distribution of income/goods/services so that "equal life chances" (often called equal opportunity) are achieved.  In practice, this boils down to dealing with the genetic luck of the draw in what kind of parents you got.  "Unlucky" people need to be given more of a chance, and this is a basic principle of equal opportunity.

CRIME AND THE BUSINESS CYCLE (UNEMPLOYMENT)
    It's often thought that more crime occurs during economic downturns, and this is generally true, for the most part.  However, some studies have found that crime actually decreases during such periods.  Juvenile delinquency, for example, is often referred to as a crime of affluence, because it goes up during economic upswings; i.e., when unemployment is low.  Cantor and Land (1985) theorize that there are two (2) mixed impacts of a weak, weaker, or weakened economy -- changes in opportunity (a decrease because there are fewer targets) and changes in motivation (an increase but generally in a lagged direction over time).   As Arvanites & Defina (2006) point out, motivation and opportunity effects need not occur at the same time.  Changes in social control and strain will play out gradually as support structures also change, as will community norms and values.

    Unemployment does cause crime among ex-offenders.  Unemployment also has stronger effects at the neighborhood rather than aggregate level.  It also depends on how you define unemployment.  Official rates only count people who are looking for work, so a whole lot of people who aren't but are still unemployed don't get counted.  There's also the existence of underemployment, low-wage, dead-end jobs with terrible working conditions, and these people get counted officially as employed when maybe they shouldn't.  Some people may mix crime and employment in various ways, thus confounding any research efforts.  Underemployment, which is sometimes called dual labor market theory, is illustrated by the following quotation:

Elliot Currie once said: "The important things are the quality of work -- its stability, its level of pay, its capacity to give the worker a sense of dignity, the esteem of peers and the community.  In our society, these fundamental needs are virtually impossible to satisfy without a job -- and are all too often difficult even with a job."

    It was mentioned that official rates of unemployment only count people who are looking for work (the U-3).  This is intended to make comparisons between countries more meaningful, but it also fosters the impression there is "less unemployment" than there actually is, especially during times of RECESSION.  During any recession (declines in income, spending, profits, and GDP), unemployment is expected to rise, and recessions are usually accompanied by a loss of confidence.  All kinds of confidence goes down -- business confidence; consumer confidence; and trust in government.  Shiller (2012) refers to recession-based trust levels as a dampening of society's "animal spirits" which are described as "the sense of trust we have in each other, our sense of fairness in economic dealings, and our sense of the extent of corruption and bad faith. When animal spirits are on ebb, consumers do not want to spend and businesses do not want to make capital expenditures or hire people."  To better capture these psychological effects, it may be preferable to use a "Real Unemployment Rate" (such as U-4 or U-6) rather than U-3.  Here is a list of all six ways unemployment is counted:

RACIAL INEQUALITY
    Recent theoretical attention has focused on the specific inequality between blacks and whites in the U.S.  The concept of relative deprivation is usually revised to a concept of "resource deprivation" which is just one cluster of relative deprivation.  According to this conception, crime is greatest in cities that have extensive residential segregation; i.e., blacks live on one side of the tracks, whites on the other.  Research results using this approach have been mixed, however, but are suggestive enough that many urban groups regularly make it an issue in housing debates, and so-called "projects" (which often have less crime than other places) are continually pegged with bad reputations.

    Unequal economic racial and class conditions have traditionally been associated with hidden economies.  These are transactions that are unreported and often illegal or outside the view and control of the state.  A hidden economy goes by many names; e.g., "black market", underground, subterranean, grey, shadow, informal, clandestine, illegal, unobserved, unreported, unrecorded, second, parallel.  There is no one single hidden economy; there are many of them, and they are pervasive under all forms of government and during all economic times, but two things are usually associated with a spike in their activity -- wars and racial inequality.  This is not to say that things like illegal drugs, prostitution, and contraband are always associated with racial groups, but that poor people who feel their impoverishment is due to racial inequality typically feel that buying things in the regular market (i.e., paying regular prices) would just afford the powers-that-be another chance to take advantage of them.  Many poor people, the young, transients, and immigrants don't trust banks because of fear their accounts would be vulnerable to fees, confiscation, judgments, levies, etc.  In fact, in many locales, the only place where goods and services can be counted on to be convenient and priced fairly is in the "black market."  Everything made in the hidden economy is "off the books" and estimates vary widely on its size.  For example, the World Bank estimates that every developed nation in the world has at least 15% of its activity hidden; in Latin America, 50%, in Asia 65%, and in Africa 72%.  The main disadvantages of a hidden economy are unstable income, no work benefits like retirement or health insurance, and the strong likelihood of becoming "trapped" in a menial job indefinitely.  However, this "trap" or cycle is not the same as the "cycle" of poverty (trapped in poverty for at least three generations).      

CONCENTRATIONS OF POVERTY

    Poverty and inequality tend to concentrate in cities, although rural poverty is a less-studied reality.  Within certain cities, distinctive clusters tend to form that are economically self-contained ghettos, barrios, slums, or enclaves.  Residents in these areas often have some ethnic or minority status that they share.  Some of these places have elaborate decorations at their entrances, such as Chinatowns.  Others provide no signs or warning that you are entering the area, such as Skid Rows.  Such areas form in cities primarily because they are areas that no one else wants.  Homeless people usually move into such areas first, and then a settlement pattern, involving immigrants, tends to follow.  What follows are some descriptive analyses of some well-known poverty areas in America.

CHICAGO'S "BACK OF THE YARDS"
    One of the most famous areas studied by criminologists (at least during the 1930s) was the stockyards area between 39th and 55th street from Lake Michigan to Western Avenue.  For those not familiar with the area, it is also known as the midway close to the University of Chicago.  Traditionally settled by Polish, Czechoslovakian, LIthuanian, and German immigrants, it was also Chicago's junk yard and city dump for years.  It is also the area where various meat-packing companies built their plants. 

    Crowding housing was the norm in Chicago's Back of the Yards.  Family members usually slept three to a bed, and families were so large that kitchens and living rooms also served as bedrooms.  People with housing also took in boarders to help pay the rent that landlords kept raising.  Smoke from nearby factories fouled the air, so there were incredibly high rates of lung disease.  Rats the size of cats roamed the area.  Swarms of flies would come around from the nearby city dump.  Inadequate city sewer facilities and street lighting aggravated the problem.  Alcoholism became a community problem, and delinquency rates increased.  When researchers investigated why delinquents acted up, the answer that came back that the delinquents were tired of being "cooped up."  Prostitution became acceptable to the so-called working girls in the neighborhood.  Local churches and labor unions helped clean up the area somewhat by the 1940s.

DETROIT'S AFRICAN-AMERICAN GHETTO
    Inner-city Detroit (the Near East Side) is probably America's most-studied ghetto for African-Americans, at least during the riot years of the 1960s and 1970s.  For about fifteen blocks from the Renaissance Center to downtown Detroit, along the Detroit river, is an area that looks like a war zone, consisting of abandoned buildings, burned-out buildings, weedy lots, gutted apartment buildings, and boarded-up stores.  85% of Detroit's African Americans live in this area.  On a windy day, you can't see very well because the dirt, grime, and trash are blinding in how it blows down the streets.  But if you look closely, you'll see little children playing on porches or in yards.  In fact, there are lots of little children, ones that survived the high infant mortality rate and low life expectancy rate.  Fires break out regularly in the area, and drive-by shootings are a regular event.  Public services, like firefighting and police protection, are inadequate for the demand.  The area also happens to be the target of racist vigilantes who periodically terrorize and attack.

    Residents of Detroit's Near East Side have tried building barbershops, saloons, drugstores, and restaurants, but businesses don't seem to stay open long.  Many families in the area live in unregistered sheds or stables located in alleys, and their children don't attend school.  Churches have had a hard time being established, and there are no employment opportunities other than the occasional day labor programs run by white employers who enter the area.  Crime, teenage pregnancy, welfare dependency, gangs, and other social problems are rampant.  When criminals are interviewed as to why they became that way, the answer is usually "because there's no place else to go."

SAN FRANCISCO'S CHINATOWN
    The seventeen-block area between the Pacific Ocean and the Financial District in San Francisco is probably America's most-studied Chinatown.  It has been around since the earthquake of 1906 which had its epicenter in this area.  One of the first things you'll notice here is that nobody speaks English.  There is also a well-developed "hidden economy" of child labor along with immigrant "sweatshops" that make the area seem busy.  Gambling is a common activity, along with prostitution and drug dealing.  And, there is a long history of organized crime involving police corruption.  Most of the restaurants have back rooms for illegal gambling, and most of the nightclubs have rooms upstairs that serve as brothels.  The area is male-dominated, and young Asian males roam the streets at night looking for action, their favorite target being to get back at some unlucky white tourist who happens to represent the "continuing insult" they feel at the hands of whites.  This pattern is relatively similar with other ethnic enclaves such as Little Taipei and Little Saigon, but it should be noted that many Asian groups have done well in establishing economic prosperity by creating banks, shopping malls, TV and radio stations, and making use of educational opportunities.      

INTERNET RESOURCES
Frequently Asked Questions about Poverty (Inst. for Research on Poverty)
Home Page of Prof. Michael Rosenfeld
Joint Center for Poverty Research
Labor Market Inconsistencies and Crime

On Poverty and Low Income
Web Guide to Inequality and Poverty

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Last updated: May 22, 2013
Not an official webpage of APSU, copyright restrictions apply, see Megalinks in Criminal Justice
O'Connor, T.  (2013). "Poverty, Inequality, and Crime," MegaLinks in Criminal Justice. Retrieved from http://www.drtomoconnor.com/1060/1060lect05.htm.