The Cost of Urban Violence: High Crime and the Price-Elasticity of Policing

More than ever, the spotlight has turned to the violent crime that is a daily reality in cities like Chicago – and the seemingly insurmountable task facing its police force. In response to the city’s continued spate of gun violence, the Chicago Police Department has called officers off of administrative duty, hoping that additional bodies on the street will help to slow the violence. However, previous academic research on such strategies has been limited, providing little guidance for anyone seeking evidence of possible policing solutions.

In a recent working paper from the National Bureau of Economic Research, authors Justin McCrary and Aaron Chalfin attempt to overcome these limitations, exploring the relationship between policing and crime using data from nearly 250 US cities over a period of 50 years. The Effect of Police on Crime: New Evidence from U.S. Cities 1960-2010 begins to examine questions that have recently plagued both city administrators and academic research. How does increasing the size of a city’s police force affect the crime rate? And, perhaps more importantly, when do the benefits of bolstering a city’s police force outweigh the costs?

To answer these questions, McCrary and Chalfin first reevaluate a critical factor in considering such questions: the police elasticity of crime. In other words, how a city’s crime rate responds to a change in the size of the police force. While this figure has been the focus of much academic discussion, the authors note that previous calculations have suffered from several problems. First are concerns about measurement error. According to the authors, the standard source of data for such studies does not provide consistently accurate data on exactly how many police offers a city employs. Next are concerns about endogeneity, or a circular relationship, between policing and crime levels. For example, if increases in crime cause cities to increase the size of their police force, then the police elasticity figure becomes difficult to measure.

After examining the link between police funding and political environments, as well as using multiple sources of police force data, the authors developed an estimate of the relationship between policing and crime – a relationship that may be used to inform policy decisions.

The police elasticity estimate suggests that increased policing is associated with larger reductions in violent crime than in property crime. This difference may seem counterintuitive; compared to property crime, violent crime is generally less likely to be planned in advance. The authors suggest, however, that the different estimates for violent and property crimes suggest that an increased police presence may prevent crime not only by discouraging potential criminals, but also by incapacitating them – that is, by incarcerating those more prone to violence.

The authors then use the police elasticity figure to conduct cost-benefit analysis of increased spending on police, developing both an average estimate of cost savings for US cities, as well as a specific analysis and ranking of individual cities in their data set. On average, the authors estimate that for every additional dollar a typical city spends on police, the reduction in crime is worth $1.60 to society.

Looking at individual cities and controlling for the city-specific costs of hiring police officers, crime rate, and income, the authors suggest that the cost-benefit ratio could be used as a rough estimate of how near cities are to an optimal level of policing. The study categorized the most extreme cities into two lists – the 30 most over-policed cities, which had returns from additional spending on police ranging from $.2 to $.6, and the 30 most under-policed cities, which had returns as high as $14.

The over-policed list is relatively uniform, containing smaller cities with low rates of poverty and crime and moderate-low levels of policing. The under-policed list, however, included cities from a range of profiles, with populations large and small, and with both high and low levels of current policing. A couple of factors were common across cities that would benefit most from increased policing: high rates of poverty and crime.

Chicago, as it turns out, falls into the area in between. With the city’s cost-benefit estimate near the optimal level of policing, these findings suggest that adding more bodies to Chicago’s police force will be only a small part of an effective strategy to reduce the city’s violent crime.

Feature Photo: cc/Thomas Hawk