Abstract
This paper investigates the role of income inequality on illegal construction in Italy, using a panel dataset at regional level over the period 2004 to 2019. Although a first recent literature on environmental crimes in Italy has already begun to study the relationship between economic growth, socio-economic variables, and environmental crime, specific analysis on the socio-economic determinants of illegal construction has not received due attention yet. Our empirical findings yield new insights highlighting the existence of a positive relationship between illegal construction and income inequality, measured by two specifications of the Gini index, controlling for socio-economic and judicial characteristics. These results are robust to model specifications and endogeneity. There is a wide room for efficiency gains that could arise from policy interventions aiming to mitigate the socio-economic strains that are often correlated with this type of environmental crime.