Police and Crime: Evidence from Cops 2.0

Source: Steven Mello, Princeton University – Department of Economics, July 6, 2016

From the abstract:
The American Recovery and Reinvestment Act increased funding for the Department of Justice’s local police hiring (COPS) grant program from $20 million in 2008 to $1 billion in 2009 and over $150 million annually in 2010-2012. Among grant winners, program rules generate quasi-random variation in the timing of grant-induced police increases. I leverage this variation to overcome simultaneity bias and estimate the causal effect of police on crime. Event study and instrumental variables estimates suggest that police added by the program resulted in large and statistically significant declines in robberies, larcenies, and auto thefts. I find evidence that these crime reductions are achieved through deterrence rather than incapacitation. Under conservative assumptions, the program’s costs outweigh its benefits, but the program is easily cost-effective under more generous assumptions about its crime effects or associated stimulus benefits. The results highlight that police hiring grants may offer higher benefit-cost ratios than other job creation programs.