Do Police Reduce Crime?

Estimates Using the Allocation of

Police Forces After a Terrorist Attack

By RAFAEL DI TELLA AND ERNESTO SCHARGRODSKY*

An important challenge in the crime literature is to isolate causal effects of police

on crime. Following a terrorist attack on the main Jewish center in Buenos Aires,
Argentina, in July 1994, all Jewish institutions received police protection. Thus, this
hideous event induced a geographical allocation of police forces that can be
presumed exogenous in a crime regression. Using data on the location of car thefts
before and after the attack, we find a large deterrent effect of observable police on
crime. The effect is local, with no appreciable impact outside the narrow area in
which the police are deployed. (JEL K42)

Classical criminology assumes that criminals papers surveyed researchers found either a pos-
are rational beings who weigh the costs and itive effect of police presence on crime or no
benefits of their actions. Gary Becker (1968) relationship between these variables. More re-
produced the first fully fledged theory of crime cent surveys by Thomas Marvell and Carlisle
based on rational behavior. His research led to Moody (1996) and John Eck and Edward Magu-
an upsurge of interest in the economics of crim- ire (2000) reach similar conclusions.
inal behavior [see, for example, Isaac Ehrlich There is, however, a serious endogeneity
(1973), Ann Witte (1980), Ehrlich and George problem with these studies that arises from the
Brower (1987), James Andreoni (1991), Rich- simultaneous determination of crime and police
ard Freeman (1996), Steven Levitt (1997), presence (see Franklin Fisher and Daniel Nagin,
Pablo Fajnzylber et al. (2000), inter alia]. One 1978). It is likely that the government of a city
of the central predictions of Becker’s theory is in which the crime rate increases will hire more
that crime will decrease when police presence police officers. Areas beset by high crime will
increases. A basic problem with this prediction thus end up with more police officers than areas
is that it has largely failed to find empirical with low crime rates, introducing a positive bias
support. In a survey of the literature, Samuel in the police coefficient in a crime regression. A
Cameron (1988) reports that in 18 out of 22 central challenge in the crime literature has been
to break this endogeneity in order to identify
causal effects of police on crime.
* Di Tella: Harvard Business School, Boston, MA 02163 Two recent papers use a time-series strategy
(e-mail: [email protected]); Schargrodsky: Universidad Tor- to address this problem. Using data for the
cuato Di Tella, Miñones 2177, (C1428ATG) Buenos Aires,
Argentina (e-mail: [email protected]). We thank a co- United States, Marvell and Moody (1996) find
editor, an extremely constructive referee, Jushan Bai, Se- Granger-causation between crime and police
bastian Galiani, Erzo Luttmer, Robert MacCulloch, Sam running in both directions. In a similar vein,
Peltzman, Andrea Rotnitzky, several key informants, and Hope Corman and H. Naci Mocan (2000) ex-
seminar participants at the 2001 AEA New Orleans meet-
ings, the University of California–Berkeley, Stanford Uni-
ploit high-frequency data for New York City to
versity, Econometric Society, LACEA, UTDT, UdeSA, show that increases in the number of police
Getulio Vargas, AAEP, and UNLP for helpful suggestions. officers cause a reduction in one out of five
The second author thanks SCID at Stanford University for crime categories (specifically, burglary). Monthly
their hospitality. Matias Cattaneo, Luciana Esquerro, and data are used because hiring and training delays
Magali Junowicz provided excellent research assistance.
The database and computer programs used in this paper are in the response of the police authority to an
available at http://www.people.hbs.edu/rditella and www. increase in crime will mitigate simultaneity bias
utdt.edu/⬃eschargr. present in low-frequency data. In order to

115
116 THE AMERICAN ECONOMIC REVIEW MARCH 2004

validly address the simultaneity concern, these state of the evidence leads Levitt (2002) to
identification strategies depend, crucially, on wonder: “If electoral cycles can provide no
the assumption that the authorities are unable to more than suggestive evidence of a causal im-
forecast crime-fighting needs.1 pact of police on crime, are there other identi-
Levitt (1997) develops a different approach fication strategies that can do better?”
using instrumental variables to break simultane- In this paper we present a different approach
ity. He documents the presence of an electoral to estimate the causal effect of police on crime.
cycle in police hiring and uses the timing of On July 18, 1994 terrorists exploded a bomb
gubernatorial and mayoral elections to instru- that destroyed the Asociacion Mutual Israelita
ment for police presence in a panel of 59 large Argentina (A.M.I.A.), the main Jewish center in
U.S. cities from 1970 –1992. Using two-stage Argentina. Eighty-five people died and more
least-squares (2SLS) techniques, Levitt finds a than 300 were wounded in the attack. One week
negative and significant effect of police on vi- later the federal government assigned police
olent crime. The pattern across individual crime protection to every Jewish and Muslim building
categories is surprising, with murder exhibiting in the country. Because the geographical distri-
the largest (and the only significant) coefficient, bution of these institutions can be presumed to
and with very imprecise estimates for the cate- be exogenous in a crime regression, this hideous
gories in which the rational model is presumed event constitutes a natural experiment whereby
to be more relevant (e.g., property crimes). Still, the simultaneous determination of crime and
the validity of the instrument might be ques- police presence can be broken.3
tioned. The timing of elections may affect crime We collected information on the number of
by way of channels other than the number of motor vehicle thefts per block in three neigh-
police officers on the street. Levitt avoids some borhoods in Buenos Aires before and after the
of these concerns by controlling for the unem- terrorist attack. The information covers the
ployment rate and public spending, although nine-month period beginning April 1 and end-
police effort and crime reporting (as well as ing December 31, 1994. We also collected in-
police hiring) may also respond to the timing of formation on the location of each Jewish
elections, particularly if the police are the target institution in these neighborhoods. We then es-
of political manipulation. Similarly, the behav- timated the effect of police presence on car
ior of judges and prosecutors may be affected theft. Our difference-in-differences estimates
by elections, something that could logically re- show that blocks that receive police protection
duce criminal activity during such times.2 experience significantly fewer car thefts than
A more severe concern raised by Justin Mc- the rest of the neighborhoods. The effect is
Crary (2002) is that Levitt’s 2SLS estimates large. Relative to the control group, car thefts
suffer from a computational error (see also Lev- fall by 75 percent in the blocks in which the
itt’s reply, 2002). When the mistake is corrected protected institutions are situated. However, the
the replication results show no effect of police effect is extremely local. We find no evidence
on crime at standard significance levels. The that police presence in a given block reduces car
theft one or two blocks away from the protected
buildings.
1
Criminologists often emphasize the benefits of antici- There has been considerable interest in iden-
pating crime patterns. David Bayley (1998), for example, tifying the mechanisms by which police pres-
states “The key assumption behind smarter law enforcement ence reduces crime. Is it that police presence
is that crime is not evenly scattered through time and space.
Police are not faced with meeting all crime threats every-
makes criminal activity less attractive (deter-
where all the time. Instead, each form of crime displays a rence), or is it that police officers apprehend
particular pattern which, if understood, provides opportuni- criminals leaving fewer of them around to com-
ties for law enforcement” (Bayley, 1998, p. 174). On the
allocation of police resources to protect high crime areas,
3
often called “hot spots,” see Lawrence Sherman et al. On natural and randomized experiments, see the dis-
(1989) and Sherman and David Weisburd (1995). cussions in Robert LaLonde (1986), Joshua Angrist (1990),
2
On the incentives faced by members of the judiciary Angrist and Alan Krueger (1991), Daniel Hamermesh
see, for example, Richard Posner (1993). (1999), and Bruce Sacerdote (2001).
VOL. 94 NO. 1 DI TELLA AND SCHARGRODSKY: DO POLICE REDUCE CRIME? 117

mit crimes (incapacitation)? Being based on Aires proper.6 Although providing this surveil-
changes in crime levels in particular locations lance required the distraction of a nonnegligible
(i.e., the protected blocks) our results are un- proportion of the police forces protecting the
likely to reflect changes in the numbers of in- areas in which these buildings are located, the
carcerated criminals, which should affect all police forces made a serious effort to maintain
neighborhood blocks, not just those containing previous levels of police presence in the rest of
Jewish institutions.4 Thus, we believe that our these neighborhoods. Government officials
estimates are most appropriately interpreted as worried that compromising police protection
the causal deterrent effect of police staffing on throughout the neighborhoods might generate in
car theft. However, it is still possible that car the residents ill feelings towards the Jewish
thefts were displaced in a way that we are community.7 Because the personnel commit-
unable to measure, in which case the effect of ment could not be met with the normal number
policing may be smaller than our estimates of police assigned to these neighborhoods, the
suggest. increased police presence was achieved with
The rest of the paper is organized as follows. officers reassigned from administrative tasks at
In Section I we describe our data. In Section II the Central Police Department, the Communi-
we discuss the empirical strategy and present cations Division, and the Mounted Police.8
our results. Section III concludes. The data analyzed in this paper are from three
noncontiguous, Buenos Aires neighborhoods
I. Data Description that collectively represent about 3.2 percent of
the city’s area and account for 6.9 percent of its
On July 18, 1994 a terrorist attack destroyed population. One police station is located in each
the main Jewish center (A.M.I.A.) in Buenos neighborhood.9 The neighborhoods were se-
Aires, Argentina.5 Seven days later, on July 25, lected on the basis of three criteria: they were
the federal government decided to provide 24- the areas with the largest numbers of Jewish
hour police protection to more than 270 Jewish institutions in the city;10 significant portions of
and Muslim institutions (including synagogues, the neighborhoods were not close to a protected
mosques, clubs, cemeteries, and schools) in Ar- institution (more than 50 percent of blocks are
gentina. Muslim institutions were protected for more than two blocks removed from a protected
fear of potential retaliations after the Islamic
organization, Hezbollah, claimed responsibility
for the attack. Nearly ten years after the attack 6
Approximately 85 percent of the Jewish population of
this protection is still provided. the country lives in Buenos Aires and its suburbs.
7
A significant proportion of the protected Institutional information for this paper was gathered
through a series of interviews with key informants, includ-
buildings are Jewish institutions within Buenos ing the Secretary of Security (third level of authority in the
federal government, behind the president and ministers), the
Chief of the Federal Police, and the Minister of the Interior
4
Daniel Kessler and Levitt (1999) use California’s sen- during the period under consideration as well as a former
tence enhancement laws for a selected group of crimes to federal judge, a former federal prosecutor, and the director
distinguish between incapacitation and deterrence. See also of a nongovernmental organization devoted to protecting
Levitt (1998). Articles studying responses to increases in civil rights.
8
detection probabilities include Avner Bar-Ilan and Sacer- For example, more than one-third of approximately 200
dote (2001) on red light violations, and Robert McCormick police officers stationed in Once, one of the neighborhoods
and Robert Tollison (1984), on fouls committed by basket- with the highest density of Jewish institutions, had to be
ball players. reassigned to protection duties. The personnel necessary to
5
This was the second terrorist attack in the city of maintain the previous level of police presence in the rest of
Buenos Aires. The Israeli embassy had been destroyed on the neighborhood was pulled from outside of this police
March 17, 1992. In the months immediately following this station.
9
first attack, the most prominent Jewish centers, including There are 53 police stations in Buenos Aires. Adrian
A.M.I.A., had been given more attention by officers on Pelacchi (2000) provides an in-depth discussion of the in-
patrol. But surveillance was not generalized and declined stitutional features of crime and the police force in Argen-
gradually. Information on these attacks can be found in tina.
10
www.atentado-amia.com.ar, www.daia.org.ar, and www. There are no Muslim institutions in the neighborhoods
bnaibrith.org. considered in our study.
118 THE AMERICAN ECONOMIC REVIEW MARCH 2004

FIGURE 1. TIMELINE OF EVENTS

institution), providing a control group for our survey, Ministerio de Justicia, 2000). Second,
study; and three was the maximum number of because criminals often use stolen cars in the
police stations for which we were able to con- commission of other crimes, victims who report
vince police authorities to provide us data.11 car thefts to police forestall confusion about
There are a total of 876 blocks in these three their involvement in such crimes. The victim-
neighborhoods. The block constitutes the unit of ization survey cited above reports that 87 per-
observation for our study.12 cent of Buenos Aires car thefts are reported to
We obtained all the information available to the police, compared to only 29 percent for all
the police (with the exception of the victim’s types of crime. A further advantage of auto theft
name) about each auto theft in these neighbor- data is that this category of crime is expected to be
hoods for the nine-month period starting April more sensitive to police presence.13 Most robber-
1, 1994 and ending December 31, 1994. Figure ies occur after a brief period of surveillance of the
1 presents a timeline of the events in our study. intended victim. Criminals concentrating their at-
April 1 to July 17 constitutes the period before tention on mobile victims might miss the presence
the terrorist attack. The interim period of July of police. A parked car, on the other hand, gives
18 to July 31 includes a first week during which criminals time to gather information on areas in
surveillance had not yet been introduced and a which they intend to commit crimes.
second week during which police began to im- Car theft information obtained from the po-
plement the protection policy. By the end of the lice includes the address at which the stolen
last week of July police protection was fully vehicle was parked, make and year of the vehi-
functioning and known to the public. Finally, cle, day and time of the report, and whether the
August 1 to December 31 covers the period of robbery was violent. During the period of anal-
police protection. ysis 794 nonarmed car thefts were reported in
Although victims’ tendency to underreport these neighborhoods.14 Although they normally
often results in official records underestimating occur in the middle of blocks, car thefts in many
crime levels, this is a minor problem for car cases are reported at corners so as to facilitate
thefts in Buenos Aires for two reasons. First, victims’ verbal descriptions of crime locations
police intervention is required to activate car at the time they file police reports. We assigned
insurance against theft, a type of insurance car- one-quarter of each car theft reported at a corner
ried by most car owners in Buenos Aires (89 to each of the intersection’s four blocks.15
percent according to the official victimization
13
Ninety-four percent of Buenos Aires car robberies
11
The police stations’ daily records, which register auto occur in the street (Ministerio de Justicia, 2000).
14
thefts on the same pages as reports of every other type of We exclude a small number (63) of armed robberies
crime or incident, are not available to the public. The Chief reported during this period as well as 86 misreports that
of the Federal Police had to issue a special authorization correspond to nonexisting or incomplete addresses or to car
instructing police station personnel to transcribe the data for thefts that occurred outside of our sample neighborhoods
us. (i.e., that were reported to the wrong police station).
12 15
We consider a block as the segment of a street be- This procedure assigns some fractions of thefts to
tween two corners. With few exceptions, Buenos Aires is a blocks outside the boundaries of the neighborhoods under
perfect grid city, with streets crossing perpendicularly at study, which reduces the total number of car thefts from 794
corners. Each block is about 100 meters (110 yards) long. to 778.75.
VOL. 94 NO. 1 DI TELLA AND SCHARGRODSKY: DO POLICE REDUCE CRIME? 119

TABLE 1—DEMOGRAPHIC CHARACTERISTICS OF CONTROL AND TREATMENT AREAS

Census tracts without Census tracts with

Demographic Jewish institutions Jewish institutions Difference
characteristics (A) (B) (C) ⫽ (A) ⫺ (B)
Home ownership rate 0.696 0.663 0.032
(0.008) (0.017) (0.019)
Overcrowding rate 0.014 0.017 ⫺0.002
(0.001) (0.002) (0.003)
Poverty rate 0.042 0.052 ⫺0.010
(0.003) (0.008) (0.009)
Education of household 11.653 11.052 0.600
head (0.147) (0.300) (0.335)
Number of household 2.719 2.685 0.034
members (0.023) (0.054) (0.059)
Female population 0.556 0.552 0.003
(0.001) (0.003) (0.003)
Unemployment rate 0.053 0.059 ⫺0.005
(0.001) (0.003) (0.003)
Age 38.005 37.690 0.315
(0.128) (0.223) (0.258)
Number of census tracts 53 14

Notes: Columns (A) and (B) present the mean of each variable for census tracts without and
with Jewish institutions in our sample. Column (C) presents the differences of means.
Standard deviations are in parentheses. Home ownership rate is the percentage of owner-
occupied houses. Overcrowding rate is the percentage of households with more than three
people per room. Poverty rate is the percentage of households with at least one unmet basic
need (overcrowding; four or more members per working member and household head
with low educational attainment; poor quality housing; school-age children not attending
school; or no fecal evacuation system). Education of the household head is the average
educational attainment of the household head in number of years. Female population is
the percentage of women in the total population. Unemployment rate is the rate of
unemployment for the population of age 14 or higher. Age is the average age of the
population.
Source: 1991 Population Census.

The completed data set included information gation for which census information is available
on the geography of these neighborhoods, in in Buenos Aires is census tracts (fracciones
particular, the precise location of each Jewish censales), which cover approximately eight to
institution. There are 45 protected institutions in ten contiguous hectares. Tests of means reveal
this part of the city. Thirty-seven of them are no statistical differences between census tracts
within these neighborhoods, while the rest are that contain and do not contain Jewish institu-
near the boundaries (but less than three blocks tions along the following dimensions: home
away).16 The geographical distribution of ownership rate, percentage of overcrowded
blocks, institutions, and car thefts is summa- households, percentage of poor households,
rized in Table A1 in the Appendix. number of household members, percentage of
Using information from the 1991 census, Ta- women, employment rate, and age. The only
ble 1 compares socioeconomic characteristics dimension along which these census tracts dif-
potentially related to crime victimization and fered was years of education of the household
car ownership across areas without and with head: 11.65 and 11.05, respectively, for tracts
Jewish institutions. The lowest level of aggre- without and with Jewish institutions. We inter-
pret these results as evidence that the surveil-
lance policy was randomly assigned across
16
None of the protected institutions in our sample is socioeconomic characteristics. Table A2 in the
located at a corner. Appendix compares demographics and car theft
120 THE AMERICAN ECONOMIC REVIEW MARCH 2004

TABLE 2—MONTHLY EVOLUTION OF CAR THEFT

More than two One block Two blocks

blocks from Jewish from nearest from nearest
nearest Jewish institution on Jewish Jewish Difference Difference Difference
institution the block institution institution (E) ⫽ (F) ⫽ (G) ⫽
Month (A) (B) (C) (D) (B) ⫺ (A) (C) ⫺ (A) (D) ⫺ (A)
April 0.09955 0.12162 0.12111 0.12278 0.02206 0.02156 0.02323
(0.248) (0.361) (0.287) (0.297) (0.060) (0.025) (0.022)
May 0.10840 0.08783 0.07763 0.09734 ⫺0.02056 ⫺0.03076 ⫺0.01106
(0.235) (0.205) (0.181) (0.259) (0.035) (0.018) (0.020)
June 0.07853 0.12837 0.07763 0.06969 0.04983 ⫺0.00090 ⫺0.00884
(0.196) (0.286) (0.215) (0.186) (0.047) (0.019) (0.015)
July (1–17) 0.03926 0.02027 0.05900 0.03097 ⫺0.01899 0.01973 ⫺0.00829
(0.145) (0.069) (0.210) (0.141) (0.013) (0.017) (0.011)
July (18–31) 0.03926 0.02702 0.07298 0.06858 ⫺0.01224 0.03371 0.02931
(0.146) (0.078) (0.217) (0.238) (0.014) (0.018) (0.017)
August 0.11836 0.04729 0.06677 0.12721 ⫺0.07106 ⫺0.05159 0.00884
(0.287) (0.175) (0.219) (0.304) (0.031) (0.021) (0.024)
September 0.10176 0.01351 0.09006 0.09845 ⫺0.08825 ⫺0.01170 ⫺0.00331
(0.256) (0.057) (0.276) (0.248) (0.015) (0.024) (0.020)
October 0.12112 0.06081 0.09782 0.08849 ⫺0.06031 ⫺0.02330 ⫺0.03263
(0.267) (0.215) (0.260) (0.236) (0.037) (0.024) (0.020)
November 0.09623 0.02702 0.11024 0.10176 ⫺0.06921 0.01400 0.00553
(0.240) (0.078) (0.288) (0.217) (0.017) (0.025) (0.018)
December 0.10176 0.02702 0.11645 0.10619 ⫺0.07474 0.01468 0.00442
(0.268) (0.078) (0.278) (0.225) (0.018) (0.025) (0.019)
Number of 452 37 161 226
blocks

Notes: The first four columns present the mean and standard deviation (in parentheses) of the number of car thefts for each
type of block per month. The average number of car thefts for July can be obtained by summing the subperiods. The last three
columns present the differences of means of columns (B), (C), and (D) relative to column (A), with standard deviations in
parentheses.

rates for the neighborhoods under study relative period, the table shows that, relative to the con-
to the whole city. trol group (i.e., blocks more than two blocks
A key dimension in our empirical exercise is away from the nearest Jewish institution),
the distance of each block in our sample to the blocks occupied by a Jewish institution experi-
nearest Jewish institution, whether or not the enced a lower level of car theft. A similar re-
building is within our neighborhoods. We dis- duction is not observed for blocks that are one
tinguish among blocks that contain a Jewish or two blocks away from the nearest Jewish
institution, blocks that are contiguous in any institution. In particular, differences of means
direction to a block containing a Jewish institu- indicate that average car theft in blocks with
tion, and blocks that are two blocks away in any protected institutions is significantly less than
direction from a block containing a Jewish in- average car theft for the control group for every
stitution. We then compare these with blocks month after July, with the exception of October.
that are more than two blocks away from a Although casual inspection of the data for
block containing a Jewish institution. blocks that contain a Jewish institution also
Table 2 presents means (and standard devia- suggests a decline for the first days of July
tions) of auto thefts for each month for each (before the attack), the difference with the
type of block. The bottom row tallies the num- control group is not statistically significant
ber of blocks of each type. For the month of for this period. Indeed, for every period prior
July we consider, separately, the period before to the terrorist attack we cannot reject that the
and after the terrorist attack. For the post-July car theft mean for the blocks with Jewish
VOL. 94 NO. 1 DI TELLA AND SCHARGRODSKY: DO POLICE REDUCE CRIME? 121

FIGURE 2. WEEKLY EVOLUTION OF CAR THEFTS

Notes: Per-week average of car thefts for blocks that contain a Jewish institution (37 blocks), blocks that are one block away
from the nearest Jewish institution (161), blocks that are two blocks away from the nearest Jewish institution (226), and blocks
that are more than two blocks away from the nearest Jewish institution (452). The horizontal lines are pre- and postattack
averages (excluding car thefts that occurred between July 18 and July 31).

institutions is equal to the mean for the con- for each block.17 We exclude car thefts that
trol group. occurred between July 18 and July 31.18 Having
Figure 2 plots the same information at a more data on blocks with and without protected insti-
disaggregated level, namely, by week. The se- tutions allows us to define a treatment and a
ries (left axis) are obviously more volatile for control group. We include month fixed effects
the aggregates that average a smaller number of that control for any aggregate shocks in the
blocks (see the bottom row of Table 2). The evolution of crime, and block fixed effects that
horizontal lines (right axis) represent the pre- control for time-invariant influences. Control-
and postattack averages for the weekly data for ling for time and individual effects, we obtain
each block type. Prior to the attack there are no the difference-in-differences estimators of the
discernible differences in these averages across effect of police on crime using the following
the different types of blocks. After the attack, model:
however, average car thefts for blocks that con-
tain Jewish institutions evolve around a lower Car Theft it ⫽ ␣ 0 Same Block Police it
mean. Instead, car theft levels for the other
types of blocks show a slight increase over time. ⫹ ␣1 One Block Policeit

⫹ ␣2 Two Blocks Policeit

II. The Effect of Police on Car Theft
⫹ Mt ⫹ Fi ⫹ ␧it ,
A. Empirical Strategy
17
Our purpose is to identify the causal effect of Of course, our monthly level of aggregation is arbi-
police presence on car thefts. Using the total trary. Similar results obtain when we aggregate the data, for
example, at the weekly level. All results reported but not
number of car thefts per block during each presented are available upon request.
month from April to December as the dependent 18
Including the period between July 25 and July 31 does
variable gives us a panel with nine observations not affect our results.
122 THE AMERICAN ECONOMIC REVIEW MARCH 2004

where: the distribution of police forces per block at any

given time, information that is confidential. Al-
Car Theftit is the number of car thefts in though we can calculate the reduced-form re-
block i for month t; gression of the outcome on the instrument, it is
Same-Block Policeit is a dummy variable that not feasible to estimate the instrumented two-
equals 1 for the months after the terrorist stage regression.
attack (August, September, October, No- A natural question with respect to our empir-
vember, and December) if there is a pro- ical approach is the extent to which police of-
tected institution in the block, 0 otherwise; ficers deployed to protect Jewish and Muslim
One-Block Policeit is a dummy variable that institutions are effective anticrime agents. Al-
equals 1 after the terrorist attack (August, though policemen in this role have limited
September, October, November, and De- scope for pursuing suspected criminals outside
cember) if the block is one block away their assigned areas, they can nevertheless in-
from the nearest protected institution, 0 terfere with crimes committed near their posts
otherwise; and communicate the presence of suspicious-
Two-Blocks Policeit is a dummy variable that looking individuals to policemen patrolling the
equals 1 after the terrorist attack (August, neighborhood. Moreover, criminals probably
September, October, November, and De- expect the police to intervene. From a more
cember) if the block is two blocks away practical point of view, there is anecdotal evi-
from the nearest protected institution, 0 dence of arrests made by policemen on duty
otherwise; guarding these institutions.20
Mt is a month fixed effect;
Fi is a block fixed effect; B. Basic Estimates
␧it is the error term.19
Table 3 reports our basic regression results.
The key aspect of our empirical exercise is Column (A) uses only the shortest measure of
that the geographical allocation of police forces proximity to police presence, Same-Block Po-
induced by the surveillance policy is exogenous lice, a dummy that takes the value 1 for every
to the distribution of crime. Officers are placed month after the attack for every block in which
in those blocks to protect a potential terrorist there is a Jewish institution. This regression
target, not in response to levels of common considers all the other blocks in the sample as
crime. Thus, the terrorist attack provides a nat- our control group. The coefficient on Same-
ural experiment that breaks the simultaneous Block Police is negative and significant.
determination of crime and police presence. Regression (B) includes a broader measure of
Note that we estimate the effect of police distance to a protected institution, One-Block
presence on crime absent direct data on the Police. This variable captures the effect of po-
distribution of police forces. In our study the lice presence on the six blocks that are contig-
postattack distribution of the protected institu- uous in any direction to each block occupied by
tions stands in for the presence of police forces. a guarded institution. The effect of Same-Block
Indeed, our paper could be construed to be an Police is negative, significant, and marginally
instrumental variables application. If a portion larger in absolute size than the one reported in
of the police force is endogenously allocated to column (A). The effect of One-Block Police
fight common crime, whereas another portion is (the effect on immediately neighboring blocks)
exogenously deployed to protect Jewish build-
ings, we could use the surveillance policy as an
instrument for police presence. A two-stage ex- 20
See, for example, La Nacion, September 11, 1999,
ercise, however, would require detailed data on which reports the conviction of a car thief apprehended in
March 1997 by an officer protecting a Jewish school in
Belgrano. Similar events were reported in Villa Luro and
Once (where a police officer protecting a Jewish institution
19
Standard errors are Huber-White (i.e., heteroskedasticity- was stabbed in a struggle with a thief who was robbing a
consistent) unless specified. nearby grocery store; the burglar was later arrested).
VOL. 94 NO. 1 DI TELLA AND SCHARGRODSKY: DO POLICE REDUCE CRIME? 123

TABLE 3—THE EFFECT OF POLICE PRESENCE ON CAR THEFT

Difference-in-difference Cross section Time series

(A) (B) (C) (D) (E)
Same-Block Police ⫺0.07752*** ⫺0.08007*** ⫺0.08080*** ⫺0.07271*** ⫺0.05843***
(0.022) (0.022) (0.022) (0.011) (0.022)
One-Block Police ⫺0.01325 ⫺0.01398 ⫺0.01158 ⫺0.00004
(0.013) (0.014) (0.010) (0.013)
Two-Blocks Police ⫺0.00218 ⫺0.00342 0.01701
(0.012) (0.009) (0.010)
Block fixed effect Yes Yes Yes No Yes
Month fixed effect Yes Yes Yes Yes No
Number of observations 7,884 7,884 7,884 4,380 3,816
R2 0.1983 0.1984 0.1984 0.0036 0.1891

Notes: Dependent variable: number of car thefts per month per block. Least-squares dummy variables (LSDV) regressions.
Car thefts that occurred between July 18 and July 31 are excluded. Column (D) excludes observations for the preattack period
(April through July). Column (E) excludes observations for the blocks that are more than two blocks away from the nearest
protected institution. Huber-White standard errors are in parentheses.
*** Significant at the 1-percent level.

is not significant. It indicates that blocks one rest of the paper we focus on this specification,
block removed from a protected institution do which takes as our control group blocks more
not experience significantly fewer car thefts than two blocks away from the guarded build-
than the rest of the neighborhood. ings. Our results do not change when we treat
Regression (C) includes a third measure of blocks one and two blocks removed from the
proximity to a guarded institution, Two-Blocks protected institutions as part of the control
Police. This measure takes the value 1 during group (or if we restrict the control group to an
the postattack period for all the blocks that are even more distant area).
two blocks away from the nearest Jewish insti- The effect of police presence in the same
tution. The significance of Same-Block Police block is quite large in economic terms. The
remains below the 1-percent level, whereas the difference-in-difference coefficient of column
coefficients on One-Block Police and Two- (C) indicates a reduction of 0.081 car thefts per
Blocks Police are not significant. For blocks month in the blocks that received direct police
within the immediate radius of the protected protection. The average number of car thefts per
institutions (one or two blocks removed) car month per block from August through Decem-
thefts are not fewer than for the control group ber for all blocks more than two blocks away
(i.e., the rest of the neighborhood).21 We later from a protected institution is 0.108. Relative to
introduced additional treatment dummies this average, car theft declines by 75 percent in
(Three-Blocks Police, Four-Blocks Police, and blocks in which a protected institution is
so forth), but their coefficients were not signif- situated.
icantly different from zero. The estimated drop in crime in protected
Our results suggest that the introduction of blocks can be approximated into an elasticity of
fixed and observable police presence generated crime with respect to police presence. The esti-
a significant decline in car thefts in the protected mated percentage change in car theft is ⫺75
blocks but no effect one or two blocks away percent. To calculate the percentage change in
relative to the rest of the neighborhoods. For the police presence, we note, for example, that in
the Once neighborhood approximately 200 of-
21
ficers were deployed prior to the attack. Assum-
Similar results are obtained if we include a set of
dummy variables that measure the distance in blocks to the ing that Buenos Aires policemen work eight-
Jewish institutions rather than the block fixed effects. None hour shifts and an average of 21 days per
of these dummies is significant. month, there are approximately 47 officers on
124 THE AMERICAN ECONOMIC REVIEW MARCH 2004

patrol at any given time. Inasmuch as Once by the approximate similarity in car theft rates
comprises 153 blocks, the average presence of before and after the attack for the control group,
officers per block is 0.31. Roughly approxi- is to focus exclusively on the time-series vari-
mated, the change in police presence is (1 ⫺ ation. Column (E) compares the pre- and postat-
0.31)/0.31 ⫽ 2.23, for an approximate elasticity tack car theft rates excluding the observations in
of car theft with respect to police of ⫺0.33. It the control group and the month fixed effects.
might also be appropriate to reduce the number The coefficient is ⫺0.058, somewhat smaller
of policemen present at any given time by the than the result in column (C). The difference is
proportion of patrol officers relative to officers due to the small upward trend in the control
performing other duties (e.g., administrative or group, although we still cannot reject equality
investigative tasks). Bayley suggests 60 percent with the difference-in-difference coefficient.23
as a reasonable number for this proportion in the We interpret the similarity between the cross-
United States (see Chapter 2 in Bayley, 1998). section, the time-series, and the difference-
Using these estimates the elasticity of car theft in-difference estimators as informative of the
with respect to police is ⫺0.17. robustness of our research design.
This number is smaller than the police elas-
ticity of motor vehicle theft reported for the C. Robustness
United States in previous work (see, for exam-
ple, Levitt, 1997; McCrary, 2002). Compari- In this subsection we present further tests to
sons with previous studies, however, must help assess the validity of our results. For ex-
allow for the fact that they use changes in crime ample, a simple potential objection is that, be-
at the city level and cannot distinguish between cause the protection policy also imposed
deterrence effects of extra police and incapaci- parking restrictions right in front of some of the
tation effects. The empirical strategy employed protected institutions, the policy might have led
in our paper, premised on policemen standing mechanically to a depressed number of victims.
guard, suggests that estimated effects are exclu- To address this issue, we measured the forbid-
sively deterrence effects. The effects of incar- den parking space in front of each institution.
ceration and subsequent reduction of the This area represents, on average, 11 percent of
criminal population (i.e., incapacitation) should the total parking space for protected blocks.24
be observed for all blocks, not just for those Under a linear relationship this factor could
occupied by protected Jewish institutions. explain a 0.012 reduction in the number of car
Before proceeding it is useful to consider two thefts (11 percent of 0.108, the average number
alternative estimators. The similarity of demo- of car thefts for the control group). We reject at
graphic characteristics and preintervention car the 1-percent significance level that our esti-
theft rates across areas with and without Jewish mated coefficient equals this value.
institutions suggests that it is worth considering
a simple cross-section estimator. This is pre-
sented in column (D) of Table 3 where we only
consider the observations for the postattack pe- column (D) are estimated collapsing the data for each block
(so that there are only 876 observations corresponding to the
riod and exclude the block fixed effects. The postattack per-block averages).
coefficient on Same-Block Police is ⫺0.073. 23
In the absence of month fixed effects, the dependent
We cannot reject the hypothesis that the Same- variable is normalized into number of car thefts per month
Block Police coefficients are equal for the of equal (30-day) length. We cannot reject equality of the
coefficient on Same-Block Police for the difference-in-
cross-section and the difference-in-difference difference and the time-series specification when the stan-
specification.22 A second alternative, suggested dard errors in column (E) are estimated collapsing the data
for each block (so that there are only 848 observations
corresponding to the pre- and postattack per-block averages
22
It can be argued that pooling observations, without for the 424 noncontrol blocks).
24
individual effects, in column (D) leads to underestimated This figure represents an upper limit of the parking
standard errors. We cannot reject equality of the coefficient restrictions generated by the terrorist attack inasmuch as
on Same-Block Police for the difference-in-difference and parking in front of some of the institutions was already
the cross-section specification when the standard errors in restricted before the attack.
VOL. 94 NO. 1 DI TELLA AND SCHARGRODSKY: DO POLICE REDUCE CRIME? 125

A related issue is that drivers may have pre- TABLE 4—CAR THEFTS BEFORE THE TERRORIST ATTACK
ferred to avoid parking near the protected insti-
Police Police Police
tutions for fear of another terrorist attack. To dummies dummies dummies
address this concern, we estimated separate po- activated on activated on activated on
lice coefficients for each month after the terror- April 30 May 31 June 30
ist attack. If fear of another terrorist attack was (A) (B) (C)
preventing neighbors from parking in these Same-Block Police ⫺0.01864 0.01467 ⫺0.03611
blocks, we should expect the effect to diminish (0.053) (0.040) (0.038)
over time.25 Yet, our coefficients on Same- One-Block Police ⫺0.02553 0.01402 0.02310
Block Police remain constant over all the (0.025) (0.019) (0.022)
Two-Blocks Police ⫺0.03263 ⫺0.01465 ⫺0.00940
months in the postattack period. Moreover, both (0.022) (0.017) (0.016)
the Israeli embassy and the A.M.I.A. terrorist Block fixed effect Yes Yes Yes
attacks were focused on the target buildings Month fixed effect Yes Yes Yes
(surrounding buildings in the block were not Number of 3,504 3,504 3,504
destroyed), so the impact of fear of future at- observations
tacks should be concentrated on parking spaces R2 0.3206 0.3202 0.3204
directly in front of the Jewish institutions.26
Notes: Dependent variable: number of car thefts per month
Interestingly, for August, the first month after per block. Least-squares dummy variables (LSDV) regres-
the attack, a negative and significant coefficient sions. Sample period: April 1–July 17. The variable Same-
is obtained on One-Block Police, leading us to Block Police in column (A) equals 1 between April 30 and
speculate that criminals needed time to realize July 17 (for blocks that contain a Jewish institution) and 0
that the police guards were actually restricted to otherwise. The same is true for One-Block Police and Two-
Blocks Police (for blocks one block away from the nearest
their posts. Instead, for the following months Jewish institution and blocks two blocks away from the
the policemen show no effect in deterring crime nearest Jewish institution, respectively). Column (B) rede-
one block away. fines these variables using May 31, and column (C) uses
We also investigate whether blocks close to a June 30. Huber-White standard errors are in parentheses.
Jewish institution exhibit a different crime dy-
namic than the rest of the neighborhood in the
period before the terrorist attack. If crime was value 1 at the end of each month prior to the
diminishing in blocks occupied by Jewish insti- attack [end of April in column (A), end of May
tutions before the attack, perhaps we are cap- in column (B), and end of June in column (C)].
turing a spurious correlation. To analyze this In this way, we reproduce our exercise as if the
issue, in Table 4 we consider a sample that terrorist attack had occurred during the pretreat-
starts on April 1 and ends on July 17. We then ment period. The nonsignificant results in Table
reestimate our basic regression redefining our 4 validate our exercise in the sense that they
Same-Block Police, One-Block Police, and reveal no special crime dynamics affecting our
Two-Blocks Police dummy variables to take the treatment group before the terrorist attack.
The question of whether the timing of the
change in the evolution of car thefts around
25
Similarly, it may be argued that after the attack com-
Jewish institutions coincides with the date po-
mon criminals experienced a bloom of civility that led them lice protection was deployed can be approached
to avoid committing crimes in front of buildings of the as a test for the timing of a structural break in
Jewish community. Again, we would expect such a bloom the model presented in Section II, subsection A.
to fade over time. Reduced crime in New York City imme-
diately after the terrorist attack of September 11, 2001 was
We estimate a series of models with treatment
attributed to a rise in civility (see, for example, “U.S. Crime dummies defined for every possible breakdate.
Rate Up, Ending Decade of Decline,” Christian Science We then calculate the sum of squared errors for
Monitor, June 25, 2002).
26
each model. The least-squares breakdate esti-
It should also be emphasized that finding a legal mate is the date for which the sum of squared
parking space in these neighborhoods is often difficult, thus
reducing the incidence of this problem. On the severe park- errors associated with the model is minimized
ing conditions in Buenos Aires, see, for example, La Na- (Jushan Bai, 1994; Bai, 1997; Bai et al., 1998;
cion, March 5, 2001. Bruce Hansen, 2001). Considering the full
126 THE AMERICAN ECONOMIC REVIEW MARCH 2004

TABLE 5—ROBUSTNESS

LSDV (A) LSDV (B) LSDV (C) LSDV (D) LSDV (E) LSDV (F) Poisson (G)
Same-Block Police ⫺0.08080*** ⫺0.08080*** ⫺0.08080*** ⫺0.08216*** ⫺0.08344*** ⫺0.12617*** 0.29635**
(0.023) (0.025) (0.022) (0.025) (0.024) (0.037) (0.145)
One-Block Police ⫺0.01398 ⫺0.01398 ⫺0.01398 ⫺0.01475 ⫺0.01658 ⫺0.01789 0.86699
(0.015) (0.016) (0.016) (0.019) (0.015) (0.019) (0.178)
Two-Blocks Police ⫺0.00218 ⫺0.00218 ⫺0.00218 ⫺0.00002 ⫺0.00243 ⫺0.00394 0.98322
(0.012) (0.013) (0.017) (0.016) (0.012) (0.015) (0.179)
Block fixed effect Yes Yes Yes Yes Yes Yes Yes
Month fixed effect Yes Yes Yes Yes No Yes Yes
Neighborhood ⫻ No No No No Yes No No
month fixed effect

Number of 1,752 7,884 7,884 32,412 7,884 5,967 5,967

observations
R ⫽ 0.6519
2
R ⫽ 0.1984
2
R ⫽ 0.1984
2
R ⫽ 0.0521
2
R ⫽ 0.2010
2
R ⫽ 0.1616
2
W ⫽ 41***

Notes: In regression (A) the dependent variable is the pre- and postattack average of car thefts per block. In regression (D) the dependent
variable is the number of car thefts per week per block transformed into monthly levels. In the rest of the table the dependent variable is the
number of car thefts per month per block. Regressions (F) and (G) exclude blocks with no thefts throughout our sample period. All regressions
exclude car thefts that occurred between July 18 and July 31. Huber-White standard errors are in parentheses in columns (A), (E), and (F).
Standard errors clustered on 876 blocks are in parentheses in column (B). Standard errors clustered on 27 neighborhood-month combinations
are in parentheses in column (C). Standard errors clustered on 111 neighborhood-week combinations are in parentheses in column (D). Poisson
incidence rate ratios (standard errors in parentheses) are reported in column (G).
*** Significant at the 1-percent level.
** Significant at the 5-percent level.

sample period (all observations from April 1 to sizes such as ours. First, we collapse the data for
December 31, including the July 18 to July 31 each block into two observations (pre- and post-
interim period), we first perform this exercise periods). In column (A) of Table 5, we regress
redefining the treatment dummies to take the the monthly averages of car thefts per block for
value 1 at the end of each month. The sum of the pre- and postattack periods on the treatment
squared errors is minimized by the regression variable. The results remain unaltered. The sec-
that considers the end of July to be the break- ond solution is to allow for an arbitrary covari-
date. To gain precision, we also perform the ance structure within blocks over time. This is
exercise at a weekly level of aggregation. In this presented in column (B) of Table 5, which
case, the breakdate estimator corresponds to the shows that our results are unaffected when stan-
end of the fourth week of July.27 Thus, at both dard errors are computed through clustering on
frequencies of aggregation the least-squares blocks.28
breakdate estimates coincide with the actual Another concern is the possible presence of
date police protection was deployed to the Jew- spatial correlation across blocks of the same
ish institutions. neighborhood that could be commonly affected
In the presence of positive serial correlation, by local shocks. To address this issue, in col-
a potential concern is that OLS regressions un- umn (C) of Table 5 the standard errors are
derestimate standard errors. This problem might calculated through clustering on neighborhood-
be exacerbated in difference-in-differences esti-
mates when the treatment is serially correlated,
as is the case for the proxy for police presence 28
The variance formula for the calculation of the clus-
that we use in our exercise. We employ two tered standard errors is given by Ẑ ⫽ qc(XⴕX)⫺1 ⫻
solutions (discussed in Marianne Bertrand et al., M
(¥h⫽1 u⬘huh)(XⴕX)⫺1; where: uh ⫽ ¥j僆Gh uj; G1, G2, ... , GM
2004) to solve this problem for large sample are the clusters; M is the number of clusters; uj ⫽ ( yj ⫺
N⫺1 M
xjb)xj; and qc ⫽ ; while yj , xj , b, X, N and k
N⫺k M⫺1
follow standard econometric notation (for further details,
27
In the weekly exercise, the second lowest sum of see STATA, 2001, p. 87). This variance estimator coincides
squared errors is obtained by the regression that considers with the Huber-White variance estimator when each cluster
the breakdate at the end of the first week of July. contains one observation.
VOL. 94 NO. 1 DI TELLA AND SCHARGRODSKY: DO POLICE REDUCE CRIME? 127

TABLE 6—EXPENSIVE VS. CHEAP, WEEKDAY VS. WEEKEND, AND NIGHT VS. DAY

Expensive Cheap car Weekday Weekend

car thefts thefts thefts thefts Night thefts Day thefts
(A) (B) (C) (D) (E) (F)
Same-Block Police ⫺0.02798*** ⫺0.04213** ⫺0.05879*** ⫺0.02201 ⫺0.02922** ⫺0.05157***
(0.009) (0.019) (0.017) (0.015) (0.013) (0.018)
One-Block Police ⫺0.00848 ⫺0.00607 ⫺0.00807 ⫺0.00591 ⫺0.01368 ⫺0.00030
(0.007) (0.011) (0.012) (0.006) (0.008) (0.011)
Two-Blocks Police ⫺0.00763 0.00392 0.00212 ⫺0.00431 ⫺0.00033 ⫺0.00185
(0.007) (0.009) (0.010) (0.006) (0.006) (0.010)
Block fixed effect Yes Yes Yes Yes Yes Yes
Month fixed effect Yes Yes Yes Yes Yes Yes
Number of observations 7,884 7,884 7,884 7,884 7,884 7,884
R2 0.1383 0.1650 0.1629 0.1792 0.1558 0.1737

Notes: Dependent variable: number of car thefts of each type per month per block. Least-squares dummy variables (LSDV)
regressions. Car thefts that occurred between July 18 and July 31 are excluded. Expensive cars are those valued above the
mean sample value ($8,403). The sample covers 244.25 expensive car thefts and 446.25 cheap car thefts. The post-July means
of expensive and cheap car thefts for the control group are 0.039 and 0.065, respectively. Car model and, thus, value is not
available for all reported car thefts. Weekday car thefts are those reported from Monday through Friday. The sample covers
518.25 weekday car thefts and 214.5 weekend car thefts. The post-July means of weekday and weekend car thefts for the
control group are 0.078 and 0.030, respectively. Night car thefts are those reported between 10 p.m. and 10 a.m. The sample
covers 239.75 night car thefts and 493 day car thefts. The post-July means of night and day car thefts for the control group
are 0.035 and 0.073, respectively. Huber-White standard errors are in parentheses.
*** Significant at the 1-percent level.
** Significant at the 5-percent level.

month combinations. This does not affect the count data models.29 The Poisson incidence
significance of our results. The number of clus- rates imply that protected blocks have 70 per-
ters, however, could be considered insufficient cent less car theft than the control group.
when we cluster on the 27 neighborhood-
month combinations. In column (D) we show D. Further Results
that the results do not change when we con-
sider weekly observations (transformed into Using standard information from the used car
monthly levels) and cluster on the 111 week- market we exploit our data on car make and
neighborhood combinations. As another strat- year to construct an estimate of the value of the
egy to control for the potential presence of stolen cars. We then analyze, in Table 6, the
local shocks, in column (E) we include differential deterrent effect of police presence
neighborhood-month fixed effects rather than (splitting the sample between cheap and expen-
our month fixed effects. Our results again re- sive cars). We perform similar analyses for
main unaltered. weekday and weekend and night and day thefts.
In column (F) we repeat the analysis, exclud- The Same-Block Police coefficients show no
ing blocks in which no thefts occurred through- statistically significant differences in the effect
out the period of analysis. Introducing police of police presence by car value, day of the
protection in these blocks should have no effect, week, or time of day (after normalizing the
the number of car thefts already being bounded coefficients by the average number of thefts of
at zero. As expected, the coefficient is larger each type).30
(more negative) when we exclude the 213 no-
theft blocks (24 percent of our sample), corre- 29
sponding to a drop in car theft of 89 percent Similar results are obtained using a negative binomial
model.
relative to the control group. Finally, a Poisson 30
For example, the Same-Block Police coefficient of
specification presented in column (G) shows ⫺0.028 in column (A) corresponds to a reduction in expen-
our results to be robust to estimation using sive car thefts of 71 percent (the post-July mean of expensive
128 THE AMERICAN ECONOMIC REVIEW MARCH 2004

TABLE 7—OTHER SOURCES OF CRIME PROTECTION

Bank Public building Gas station All

(A) (B) (C) (D)
Same-Block Police ⫻ (1 ⫺ Protection) ⫺0.08391*** ⫺0.08498*** ⫺0.08196*** ⫺0.09008***
(0.024) (0.024) (0.023) (0.025)
Same-Block Police ⫻ Protection ⫺0.02641** ⫺0.00766 ⫺0.03891 ⫺0.02141
(0.012) (0.040) (0.070) (0.022)
One-Block Police ⫻ (1 ⫺ Protection) ⫺0.01940 ⫺0.01350 ⫺0.01375 ⫺0.01869
(0.014) (0.014) (0.014) (0.015)
One-Block Police ⫻ Protection 0.04762 ⫺0.02462 ⫺0.03266 0.01921
(0.047) (0.021) (0.046) (0.032)
Two-Blocks Police ⫻ (1 ⫺ Protection) ⫺0.00206 ⫺0.00433 ⫺0.00231 ⫺0.00481
(0.012) (0.012) (0.012) (0.012)
Two-Blocks Police ⫻ Protection ⫺0.00375 0.05640 0.00275 0.01644
(0.043) (0.051) (0.058) (0.030)
F-stat† 5.21** 2.80* 0.35 4.31**
Block fixed effect Yes Yes Yes Yes
Month fixed effect Yes Yes Yes Yes
Number of observations 7,884 7,884 7,884 7,884
R2 0.1987 0.1986 0.1985 0.1987

Notes: Dependent variable: number of car thefts per month per block. Least-squares dummy variables (LSDV) regressions.
Car thefts that occurred between July 18 and July 31 are excluded. Protection equals 1 when a Bank (Column A), a Public
Building (Column B), a Gas Station (Column C), or any of these (Column D) is located in the block, 0 otherwise.
Huber-White standard errors are in parentheses.
* Significant at the 10-percent level.
** Significant at the 5-percent level.
*** Significant at the 1-percent level.
†
Null hypotheses: Same-Block Police ⫻ (1 ⫺ Protection) ⫽ Same-Block Police ⫻ Protection.

For some of the blocks to which police were presence for previously protected blocks is sig-
assigned postattack some source of crime pro- nificantly different from zero only in blocks that
tection was already in place. In Table 7 we have a bank [see column (A)], where police are
compare the effect of the additional police pro- present only during office hours and often inside
tection for blocks occupied by a bank, public the building.
building (including foreign embassies), gas sta-
tion, or any of these buildings relative to other E. Discussion
guarded blocks not previously provided this se-
curity. The first two cases (bank and public The focus of our paper is to estimate the
building) indicate some police protection al- deterrent effect of police on car theft and to
ready in the block. The latter case (gas station) explore the internal validity of our estimates. It
implies significant light and movement during is also worth discussing briefly the public fi-
the entire day. As expected, the coefficient on nance question (i.e., whether treatment benefits
additional police presence is always smaller outweigh costs) and the external validity of our
when previous sources of crime protection were results (i.e., whether our estimates can be used
already present in the block. The effect of police to predict the effect of police on car theft in
other settings). Although a full evaluation of
these issues is not possible, some of the infor-
car thefts in the control group is 0.039). The coefficient of mation that we have available is worth
⫺0.042 for cheap car thefts [column (B)] indicates a reduc- considering.
tion of 65 percent (the post-July mean of cheap car thefts in
the control group is 0.065). The difference is not statistically A starting point for the cost-benefit analysis
significant. Note that car model and, thus, value is not is the direct cost of police surveillance relative
available for all reported car thefts. to car values. During this period, a Buenos
VOL. 94 NO. 1 DI TELLA AND SCHARGRODSKY: DO POLICE REDUCE CRIME? 129

Aires policeman was earning on average a the city, meaning that, given the noise in the
monthly wage of $800. Given that policemen official statistics and the trends affecting the
work eight-hour shifts and average 21 work level and the distribution of crime during the
days per month, the monthly cost of providing period, it is unclear whether the impact of our
police protection for one block is approximately natural experiment can be perceived at the ag-
$3,428. Our estimates suggest that police pres- gregate level.
ence in a block would induce a reduction of With respect to the external validity of our
0.081 of a car theft per month. The average findings, a number of issues are worth mention-
value of the stolen cars in our sample is ing. First, the standing-policeman technology
$8,403.31 Thus, in terms of the reduction in auto we analyze is similar to that used for private
theft exclusively, the protection policy was not security in the most affluent neighborhoods of
cost effective. Of course, visible police protec- Buenos Aires. In these areas booths for private
tion provides other social benefits besides a security guards are placed at each corner ap-
lower rate of car theft. It deters other types of proximately 100 meters from one another. If
crime not considered in our study (e.g., burglar- privately provided surveillance covers all parts
ies or terrorist attacks) and provides citizens of the block (i.e., there are no blind spots) and
with feelings of greater security. Moreover, in- there are no advantages to having a section of
capacitating criminals is likely to substantially the block protected by two security guards (i.e.,
benefit society, whereas our estimates capture overlapping protection), then the maximum pro-
only deterrence effects. On the other hand, tection distance is about 50 meters, the distance
crime reduction in the protected blocks could from the security guard’s booth to the house
simply reflect the displacement of criminal ac- furthest from his surveillance. Interestingly, our
tivity to other areas of the city as we discuss results are consistent with the coverage solution
below. reached by the private security market.
Another way to evaluate the impact of the Second, our results involving a technology
policy, relevant for the public finance question, based on police in a fixed location might be
is to determine whether total car thefts in Bue- relevant in the analysis of other forms of police
nos Aires were affected as much as or less than presence such as officers on patrol. Switching to
the reduction in the blocks that contain pro- mobile police is unlikely to induce a different
tected institutions. Unfortunately, reliable response in car theft given that the act of break-
monthly data for car thefts citywide in Buenos ing into a car is of extremely short duration.
Aires are unavailable. The annual published Because criminals check that there are no po-
crime data show a general upward trend in car licemen watching when they start the process,
thefts and other property crime during the the likelihood of discovery conditional on no
1990’s in the city of Buenos Aires (that is less monitoring at the start of the break-in is virtu-
apparent in the rest of the country). The year ally zero.32 Furthermore, the kind of police
1994 was not an outlier in this process. One
should also note that increments in crime levels 32
were concentrated in low-income urban areas Our key informants have emphasized that the proba-
bility of a policeman on patrol actually witnessing a crime
(see Di Tella et al., 2002), whereas the neigh- being committed is quite low. The most likely case is that
borhoods considered in our study were middle- someone who has witnessed a crime calls the police. The
to-high income areas. Finally, the protected Economist (February 24, 2001) makes a similar argument:
blocks probably represent too small a share of “But putting more police on the beat will probably not have
much impact on crime figures. A single patrolling officer
typically covers an area containing 18,000 inhabitants,
7,500 houses, 140 miles of pavements, 85 acres of parks, 77
31
If some stolen cars are recovered in working condi- miles of roads, 23 pubs and 10 schools. The chance of that
tion, then only a fraction of their value should be counted. officer actually catching an offender red-handed is ex-
Official publications put the proportion of cars stolen in tremely small. A Home Office study estimates that a patrol-
Buenos Aires that are never recovered at 60 percent (Min- ling policeman in London might expect to pass within 100
isterio de Justicia, 2000). One should also count, however, yards of a burglary in progress once every eight years, and
the amount of time consumed by the recovery process and even on that occasion is very unlikely to realize that a crime
the cost of any needed repairs. is taking place, let alone catch the burglar.”
130 THE AMERICAN ECONOMIC REVIEW MARCH 2004

presence we analyze is visible. An alternative, that are located two blocks away from the pro-
to deploy police agents in plain clothes, would tected institutions (for example, using a binary
make breaking into a car more risky for crimi- Logit model that treats equally any positive
nals, but it could make reporting crimes to number of thefts). More generally, since we do
nearby police more difficult for victims and not know how criminals select the blocks in
bystanders. Interestingly, policy makers’ ten- which they steal cars, we know little about
dency to address public pressure for more pro- where they move their activities when they are
tection from crime by deploying more visible deterred from stealing in a specific location. It is
police on the streets could imply counterpro- indeed possible that the car theft deterred in the
ductive police reallocations.33 Given the highly protected blocks was displaced to other areas of
local impact of street deployments, it would be the city (inside or outside the neighborhoods in
interesting to obtain estimates of the effect of our sample), although our study does not have
extra policemen on investigative tasks. the statistical power to learn about the magni-
Finally, an important issue in establishing the tude of these displacement effects.
external validity of our findings is the potential
presence of crime displacement to other areas.34 III. Conclusions
The simplest form of this hypothesis involves
displacement to the immediately adjacent A crucial challenge in the literature on crime
blocks. If all the criminals that used to operate is to obtain an estimate of the effect of increased
in the protected blocks moved to the contiguous police presence. In this paper, we have tackled
blocks, one would expect an increase in crime this question exploiting a natural experiment.
in adjacent blocks of ⫺(⫺0.08/4.35) ⫽ 0.018, On July 18, 1994 a terrorist cell exploded a
where 4.35 is the average sample number of bomb that destroyed the main Jewish center in
blocks one block away from each protected the city of Buenos Aires, killing 85 people and
block (4.35 ⫽ 161/37). We reject the complete wounding more than 300. Following the attack
adjacent displacement hypothesis at conven- a police officer was stationed in front of each
tional levels of significance. However, under Jewish and Muslim institution in the country.
some specifications we found evidence consis- Because the distribution of these institutions
tent with the presence of displacement to blocks can be presumed to be exogenous in a crime
regression, it is possible to use this hideous
event to break the simultaneous determination
33
A similar point is raised by a former policeman in an of crime and police presence.
open letter to The Washington Post: “The other alternative We collected data on the precise locations of
was to ‘get officers from behind desks’ to walk foot patrols, car thefts in three neighborhoods in Buenos
allegedly at no additional cost. But while this second
method seemed more palatable, it had hidden costs that
Aires before and after the attack. We find a
undermined the police department’s ability to solve and large, negative, and highly local effect of police
prevent crimes. Most of the so-called desk officers were presence on car theft. Blocks that receive police
performing important investigative and support functions protection experience 0.081 fewer car thefts per
that happen to occur out of public sight. In each staffing month than blocks that do not. The postattack
cycle in which desk officers were put on the street, the
police department’s ability to solve crimes such as murder, average number of car thefts per block for our
robbery, rape and assault was diminished.” (“Citizen Police control group is 0.108, so police protection in-
for the City,” The Washington Post, September 10, 2000.) duces a decline in auto theft of approximately
The literature on crime distinguishes between two different 75 percent. Blocks one or two blocks away from
forms of law enforcement: monitoring and investigation
(see, for example, Dilip Mookherjee and Ivan Png, 1992).
where protection is provided, however, do not
34
Derek Cornish and Ronald Clarke (1987) and Rene experience fewer car thefts relative to the rest of
Hesseling (1994) survey the criminology literature on dis- the neighborhoods.
placement. Ian Ayres and Levitt (1998), John Lott (1998), The robustness of our empirical strategy is
and Mark Duggan (2001) study the effect of introducing illustrated by the fact that we reach similar
unobservable protection devices (Lojack and concealed
handguns) with potentially positive externalities. Similarly, conclusions using a cross-section, a time-series,
in our study, observable police presence might induce neg- or a difference-in-difference approach. The re-
ative externalities in neighboring areas. sults are also robust to alternative specifications
VOL. 94 NO. 1 DI TELLA AND SCHARGRODSKY: DO POLICE REDUCE CRIME? 131

and do not seem to be generated by spurious our approach, however, is that it does not allow
correlations associated with different crime dy- us to provide a precise estimate of the extent of
namics for the treatment and control groups. crime displacement to other areas.
The empirical strategy employed in our paper, Our results, in brief, suggest that a posted and
premised on policemen standing guard, sug- visible police guard exerts a large, negative,
gests that the estimated effects correspond ex- local effect on auto theft and little or no effect
clusively to deterrence effects. A limitation of outside a narrow area.

APPENDIX

TABLE A1—DISTRIBUTION OF BLOCKS, INSTITUTIONS, AND CAR THEFTS BY NEIGHBORHOOD

Belgrano Villa Crespo Once Total

Blocks 463 260 153 876
Institutions 9 14 22 45
Inside 7 13 17 37
In boundaries 2 1 5 8
Car thefts 530 191 73 794
April 1–July 17 197 73 24 294
July 18–July 31 30 9 7 46
August 1–December 31 303 109 42 454

TABLE A2—NEIGHBORHOOD AND CITY CHARACTERISTICS

Villa City of
Belgrano Crespo Once Buenos Aires
Home ownership rate 0.731 0.670 0.593 0.694
Overcrowding rate 0.009 0.022 0.026 0.018
Poverty rate 0.026 0.058 0.078 0.070
Education of household head 12.338 10.278 10.516 10.482
Number of household members 2.768 2.763 2.506 2.805
Female population 0.561 0.543 0.550 0.546
Unemployment rate 0.051 0.061 0.055 0.059
Age 38.166 36.874 38.373 38.022
Car theft rate 478.703 298.315 167.952 219.231

Notes: Home ownership rate is the percentage of owner-occupied houses. Overcrowding rate
is the percentage of households with more than three people per room. Poverty rate is the
percentage of households with at least one unmet basic need (overcrowding; four or more
members per working member and household head with low educational attainment; poor
quality housing; school-age children not attending school; or no fecal evacuation system).
Education of the household head is the average number of years of education of the household
head. Female population is the percentage of women in the total population. Unemployment
rate is the rate of unemployment for the population of age 14 or higher. Age is the average
age of the population. The data source for the demographic characteristics is the 1991
Population Census. Car theft rate is the annual rate per 100,000 inhabitants for 1994. For the
three neighborhoods, the April through December data available for this study are extrapo-
lated into annual rates. The data source for car theft rates are the Justice Ministry for the whole
city, and the Federal Police for the three neighborhoods.
132 THE AMERICAN ECONOMIC REVIEW MARCH 2004

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78. M. Shahe Emran, Asad Islam, Forhad Shilpi. 2018. Distributional Effects of Corruption When
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79. Jacob Kaplan, Aaron Chalfin. 2018. More Cops, Fewer Prisoners?. SSRN Electronic Journal .
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80. Sebastian Blesse, André Diegmann. 2018. Police Reorganization and Crime: Evidence from Police
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86. Catalina Gómez, Hermilson Velásquez, Andrés Julián Rendón, Santiago Bohórquez. 2017. Crime in
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94. Itai Ater, Yehonatan Givati, Oren Rigbi. 2017. The Economics of Rights: Does the Right to Counsel
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98. Aaron Chalfin, Justin McCrary. 2017. Criminal Deterrence: A Review of the Literature. Journal of
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LeSage and Pace (2004, 2009), Elhorst (2014), and Arbia (2006, 2014). See also a nice overview of
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110. Ana M. Ibbbez, Amy Ritterbusch. 2017. Impact of a Judicial System Reform on Police Behavior:
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113. Patricio Dommnguez. 2017. How Offenders and Victims Interact: A Case-Study from a Public
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114. Vikram Maheshri, Giovanni Mastrobuoni. 2017. Do Security Investments Displace Crime? Theory
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115. Nicolas L. Bottan, Andrrs Ham, Ignacio Sarmiento-Barbieri. 2017. Can't Stop the One-Armed
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116. Christopher Blattman, Donald P. Green, Daniel Ortega, Santiago Tobon. 2017. Pushing Crime
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117. Nicholas Lovett, Yuhan Xue. 2017. Do Greater Sanctions Deter Youth Crime? Evidence from a
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119. Stephan Meier, Lamar Pierce, Antonino Vaccaro, Barbara La Cara. 2016. Trust and in-group
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141. Daniel Mejía, Pascual Restrepo. 2016. Crime and conspicuous consumption. Journal of Public
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142. Lucija Muehlenbachs, Stefan Staubli, Mark A. Cohen. 2016. The Impact of Team Inspections on
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148. David Weisburd, David P. Farrington, Charlotte Gill. Conclusion: What Works in Crime Prevention
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149. Olivier Marie. 2016. Police and thieves in the stadium: measuring the (multiple) effects of football
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150. Mauricio Rivera. 2016. The sources of social violence in Latin America. Journal of Peace Research
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151. Kathrin Dengler-Roscher, Thomas Roscher. 2016. Do Criminals Behave Rationally? Evidence from
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152. Zhixin Dai, Fabio Galeotti, Marie Claire Villeval. 2016. The Efficiency of Crackdowns: A Lab-in-
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153. Josef Montag, Tommm Brabenec. 2016. Criminals and the Price System: Evidence from Czech Metal
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154. Paul Liu, Marco Fabbri. 2016. More Eyes, (No Guns,) Less Crime: Estimating the Effects of Unarmed
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155. Sebastian Galiani, Ivan G. Lopez Cruz, Gustavo Torrens. 2016. Stirring Up a Hornets' Nest:
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156. Kevin E. Davis. 2016. Multijurisdictional Enforcement Games. SSRN Electronic Journal . [Crossref]
157. Camilo Acosta Mejia, Angela Zorro. 2016. Certainty vs. Severity Revisited: Evidence for Colombia.
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160. Emily Weisburst. 2016. Safety in Police Numbers: Evidence of Police Effectiveness and Foresight from
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161. Federico Masera. 2016. Bringing War Home: Violent Crime, Police Killings and the Overmilitarization
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162. Tommm Brabenec, Josef Montag. 2016. Criminals and the Price System: Evidence from Czech Metal
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163. Paul E. Carrillo, Arun S. Malik. 2016. Pollution or Crime: The Effect of Driving Restrictions on
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164. Cody W. Telep, David Weisburd, Sean Wire, David Farrington. 2016. PROTOCOL: Increased Police
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169. Daniel Mejía, Pascual Restrepo, Sandra V. Rozo. 2015. On the Effects of Enforcement on Illegal
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173. Daniel Montolio, Simón Planells-Struse. 2015. When police patrols matter. The effect of police
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184. Joanna Shepherd, Paul H. Rubin. Economics and Crime 80-86. [Crossref]
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188. Gabriel M. Ahlfeldt, Bastian Franke, Wolfgang Maennig. 2015. Terrorism and International Tourism:
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189. Luis Aguiar, JJrg Claussen, Christian Peukert. 2015. Online Copyright Enforcement, Consumer
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190. Lones Smith, Jorge VVsquez. 2015. Crime and Vigilance. SSRN Electronic Journal . [Crossref]
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192. Amanda Ross, Anne W. Walker. 2015. The Impact of Low Priority Laws on Criminal Activity:
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193. Pascual Restrepo. 2015. The Mounties and the Origins of Peace in the Canadian Prairies. SSRN
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194. Vincenzo Bove, Evelina Gavrilova. 2015. Policeman on the Frontline or a Soldier? The Effect of Police
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195. Fernanda MMrquez-Padilla, Francisco PPrez-Arce, Carlos Rodrrguez-Castelln. 2015. The (Non-)
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196. Tobias Cagala, Ulrich Glogowsky, Johannes Rincke. 2014. A field experiment on intertemporal
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197. Nik Ahmad Sufian Burhan, Yohan Kurniawan, Abdul Halim Sidek, Mohd Rosli Mohamad. 2014.
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200. Mikael Priks. 2014. Do Surveillance Cameras Affect Unruly Behavior? A Close Look at Grandstands.
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201. Luis Carlos Reyes. 2014. Estimating the Causal Effect of Forced Eradication on Coca Cultivation in
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209. MARCO CASTILLO, RAGAN PETRIE, MAXIMO TORERO, ANGELINO VICEISZA. 2014.
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210. Daron Acemoglu, Camilo Garcia-Jimeno, James A. Robinson. 2014. State Capacity and Economic
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211. Donald J. Lacombe, Amanda Ross. 2014. Revisiting the Question 'More Guns, Less Crime?' New
Estimates Using Spatial Econometric Techniques. SSRN Electronic Journal . [Crossref]
212. Daniel Montolio, Simmn Planells. 2014. When Police Patrols Matter. The Effect of Police Proximity
on Citizenss Crime Risk Perception. SSRN Electronic Journal . [Crossref]
213. Manuel Sebastian Prrmel. 2014. Norm Spillovers and Their Limits. SSRN Electronic Journal .
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214. Kristian Hoelscher, Enzo Nussio. 2014. Understanding Unlikely Successes in Urban Violence
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215. Holger Spamann. 2014. The US Crime Puzzle: A Comparative Perspective on US Crime &
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216. Brendan O'Flaherty, Rajiv Sethi. 2014. Urban Crime. SSRN Electronic Journal . [Crossref]
217. Zhixin Dai, Robin M. Hogarth, Marie Claire Villeval. 2014. Ambiguity on Audits and Cooperation
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218. Robert A. Blair, Christopher Blattman, Alexandra Hartman. 2014. Predicting Local Violence. SSRN
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219. Tommm Brabenec, Josef Montag. 2014. Criminals and the Price System: Evidence from Czech Metal
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224. Marco Gonzalez-Navarro. 2013. Deterrence and Geographical Externalities in Auto Theft. American
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228. YU LIU, THOMAS M. FULLERTON, NATHAN J. ASHBY. 2013. ASSESSING THE
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231. Kyriakos C. Neanidis, Vea Papadopoulou. 2013. Crime, fertility, and economic growth: Theory and
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232. Christopher S. Koper, Bruce G. Taylor, Daniel J. Woods. 2013. A randomized test of initial and
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233. Asif Islam. 2013. Is there a gender bias in crime against firms for developing economies?. Women's
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