The Impact of Rainfall‐Induced Income Shocks on Crime: Evidence From Indonesia

ABSTRACT This paper investigates the causal impact of rainfall shocks on crime rates in Indonesia by utilising two novel crime data sources: newspaper reports and crime victimisation data from a household survey. By leveraging the income data from the household survey, this study directly tests the economic channel through which rainfall affects crime. The findings reveal mixed results depending on the data source. Newspaper reports indicate no relationship between rainfall shocks and crime incidents. In contrast, analysis using the crime victimisation data demonstrates that positive rainfall shocks reduce the probability of becoming a victim of any crime by 12% compared with negative rainfall shocks. This reduction is driven entirely by property crimes, with no impact observed on other types of crime. These results highlight the nontrivial role of economic conditions in influencing property‐related crime. I explore various reasons that may contribute to the different results between the two data sources.