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.
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.DOI: 10.1257/000282804322970733