Friday, June 17, 2005

Creative ways to fund more police

Virginia Postrel, one of my favorite writers and bloggers, has an interesting column in the New York Times yesterday about studies definitely showing that increasing police presence reduces crime in a cost effective way (her blog post, study from Alex Tabarrok at the great economics blog Marginal Revolution). She points out that previous studies always ran into the cause and effect problem: higher crime cities hire more officers, so the linkage was uncertain. But these studies looked at DC during high terrorism alert situations, when there were extra officers on the street regardless of the crime rate. Not only did crime drop, but it was a big payoff:

But so far, the case for adding more police officers is strong. Using generally accepted cost estimates, Professor Tabarrok said, every $1 to add officers would reduce the costs of crime by $4. The authors did not identify a point of diminishing returns.

"We estimate that if we had a 10 percent increase in police, crime would go down by about 4 percent," he said, adding that researchers taking other approaches have come up with similar numbers. Nationally, he said, "that means about 700,000 fewer property crimes and 213,000 fewer violent crimes."

As a back-of-the-envelope calculation, Professor Klick offered an even more striking suggestion. "It wouldn't be unreasonable," he said, "based on our estimates and based on conservative estimates of the costs of crime, to say it would be cost-effective to actually double the number of people working in police forces, which is pretty amazing."

So here's the next step I'm wondering about: find out the insurance costs of those crimes (property and health insurance), and maybe there's a way private insurers might share the cost of extra police officers if it pays off for them? A voluntary program might be set up, or there might need to be a tax on insurance that goes to police - as long as the numbers show insurance rates should end up dropping more than the tax amount, so it's a net plus.

Unfortunately, I doubt it's that easy. If I had to guess, most victims of these crimes are low-income and uninsured. Alternately, there might be enough reduced costs in county emergency rooms to come up with extra funding for police. Regardless, it looks like it's well worth a study. Sounds like a great opportunity for a local economics professor to make a name for him or herself. Any volunteers?


At 6:34 AM, June 20, 2005, Anonymous Anonymous said...

As I suggested in the NYT's column, we'd be happy to redo the study for any city willing to share its daily crime data (by type of crime and by area of the city) and that's willing to tell us how it changes its officer deployment when the terror alert level changes. Houston's police may be more/less effective than DC's police.


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