Investing in Police Yields Quantifiable Benefits in Preventing Crime

RAND Review News for Summer 2010

Investing in Police Yields Quantifiable Benefits in Preventing Crime

Existing research on the costs of crime and the effectiveness of police can be used to create credible cost-benefit analyses of the value of investing in more police officers, according to a RAND study.

“Many cities face financial difficulties and have to make tough choices about how to spend taxpayers’ money,” said Paul Heaton, the study’s author and an associate economist at RAND. “The best available research suggests that police officers generate considerable value in economic terms.”

The costs of crime include those borne by victims, insurers, government, and society at large. The costs also include those that are tangible, such as a victim’s medical bills or lost productivity, and those that are intangible, such as reduced quality of life in a crime-ridden neighborhood.

The large net benefits come mostly from averting homicides.

The study estimates the cost of crime in seven major cities. Crime costs the residents of Dallas approximately $3.4 billion annually, or 4 percent of that city’s economic activity, while annual crime costs for residents of Chicago are roughly $8.3 billion, or nearly 6 percent of Chicago’s economic activity.

As a case example of the cost-benefit approach, the study compared the costs and benefits of the roughly 10-percent expansion of the police force in Los Angeles that began in 2005 at a projected cost of $125 million to $150 million per year. As the table shows, these additional officers are projected to reduce crime costs in the city by about $475 million each year, a value substantially above the cost of hiring the officers. The large net benefits come mostly from averting homicides.

Increasing the Number of Police in Los Angeles by 10 Percent Would More Than Pay for Itself in Crime-Reduction Benefits

Crime Type Average Yearly Number of Crimes in Los Angeles,
Projected Crimes Averted per Year from a 10-Percent Increase in Police Cost per Crime
(in U.S. dollars)
Annual Projected Cost Savings
(in millions of U.S. dollars)
Homicide 453 42 $8,649,216 $363
Rapea 951 0 $217,866 0
Robbery 13,743 814 $67,277 $55
Serious assault 14,169 414 $87,238 $36
Burglary 20,462 827 $13,096 $11
Larcenya 59,704 0 $2,139 0
Motor-vehicle theft 24,872 1,094 $9,079 $10
Annual aggregate cost savings (in millions) $475
Annual costs of increasing Los Angeles police force by 10 percent (in millions) $125–$150
Annual Net Cost Savings (in millions) $325–$350

SOURCE: Hidden in Plain Sight, 2010.
aBecause the authors could not derive statistically significant estimates of the effect of police on reducing the incidence of rape and larceny, the authors assumed, conservatively, that none of these crimes was averted by additional police.

The study reviewed several analytical methods, each with its pros and cons, for estimating the costs and benefits of police. The choice of methods and assumptions will influence the outcomes of the cost-benefit calculations. Many police investments, such as the expansion in Los Angeles, appear favorable across a wide range of alternative modeling assumptions.

“Public safety policymakers in a city should know the cost of crime to their city,” Heaton said. “This study provides the simple steps these communities need to estimate the crime cost, as well as steps to estimate the return on investment in police.” square

For more information:

Hidden in Plain Sight: What Cost-of-Crime Research Can Tell Us About Investing in Police, RAND/OP-279-ISEC, ISBN 978-08330-4956-8, 2010.