American Economic Review: Vol. 94 No. 1 (March 2004)
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Do Police Reduce Crime? Estimates Using the Allocation of Police Forces After a Terrorist Attack
Di Tella, Rafael, and Ernesto Schargrodsky. 2004. "Do Police Reduce Crime? Estimates Using the Allocation of Police Forces After a Terrorist Attack." American Economic Review, 94(1): 115-133.
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.
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Di Tella, Rafael