Evaluating the existence of a natural U.S. hate crime rate using a fractional integration approach

We assess the degree of persistence for 36 U.S. states’ hate crime rates using fractional integration. For 9 states the hate crime rate exhibits mean reversion. The hate crime rate tends to an upward trend for 5 states (possibly reflecting increased hate crime reporting/compliance through time) and for 3 states there is evidence that the hate crime rate reverts to a downward trend. This is consistent with an evolving natural rate over the sample for these 8 states. For 17 states law enforcement expenditures aimed at deterrence will at best lower offending in the short run because the hate crime will return to its constant or evolving natural rate in the long run. Corrective policies designed to change the natural rate are recommended for these states. The results for the District of Columbia and Utah are ambiguous, and for the remaining 17 states there is no reversion to a natural hate crime rate.