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America: Number of police

Police are the 1st line of defense against crime [1]. In America in 1990, more than $60 billion was spent each year on policing. Unfortunately, studies on the connection between the number of police and crime in the 1970s and 1980s [2], tended to find an insignificant (or negative correlation) between the number of police and the crime rate. These studies typically failed to account one particular phenomenon - the political response to rising crime is to hire more police. In essence, the number of police affect the amount of crime, but the amount of crime also affects the number of police. This means that when crime is increasing, police numbers are increased and when crime is decreasing, police numbers are decreased.

There are a number of ways in which to reduce this effect. For example, the government response to rising crime lags behind by of a number of months. This means that the phenomenon will be less important when analysing monthly data compared to annual data. It is also possible to use the timing of US mayoral elections to understand how police hiring effects crime. Simply put, politicians often increase the size of the police force in advance of elections disproportionately, but elections are unlikely to impact crime directly. Both of these methods have been employed by a number of researchers [3] to show clearly that increasing the number of police reduces the crime rate over the medium term (i.e several months).

Looking at US national statistics, one can draw some rather telling conclusions. The number of police of officers per capita, which is tracked by the FBI and reported annually, increased by 50,000 – 60,000 of officers, or roughly 14 percent, in the 1990s. It has been shown that [1] the increase in police between 1991 and 2001 accounted for a crime reduction of 5-6 percent across the board. The increase in police can thus explain somewhere between 10-20% of the overall decline in crime over this period.

Whether this investment in police has been a cost-effective approach to reducing crime is a different question. As noted above, annual expenditures on police at the beginning of this period were $60 billion, so the cost of the 14 percent increase in police is $8.4 billion a year. The benefits of crime reduction are more difficult to quantify. The most commonly used estimates of the cost of crime to victims [4] places the costs of crime at roughly $500 billion annually in the early 1990s. Given the sharp declines in crime, today’s estimates would likely be substantially lower. If the increase in police reduced crime by 5–6%, then the corresponding benefit of crime reduction is $20 –25 billion, well above the estimated cost.

[1] S. Levitt. 2004. "Understanding Why Crime Fell in the 1990s: Four Factors that Explain the Decline and Six that Do Not." Journal of Economic Perspectives, 18:1 pp 163–190.
[2] S. Cameron. 1988. “The Economics of Crime Deterrence: A Survey of Theory and Evidence.” Kyklos 41:2, pp. 301–23.
[3] S. Levitt. 1997. “Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime.” American Economic Review. 87:3, pp. 270 –90; H Corman and H Mocan. 2000. “A Time-Series Analysis of Crime, Deterrence, and Drug Abuse in New York City.” American Economic Review 90, pp. 584 – 604; T. Marvell and C Moody. 1996. “Specification on Problems, Police Levels, and Crime Rates.” Criminology. November, 34, pp. 609 – 646; J. McCrary. 2002. “Do Electoral Cycles in Police Hiring Really Help Us Estimate the Effect of Police on Crime?.” American Economic Review. September, 92, pp. 1236–1243.
[4]T. Miller, M. Cohen and S. Rossman. 1993. “Victim Costs of Violent Crime and Resulting Injuries.” Health Affairs. 12:4, pp. 186 –97.

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