Private Security Cost Effective At Cutting Crime: Study


Private security turns out to be a cost-effective way of cutting crime, says a study reported by The Economist in an article available only to subscribers. The study by Philip Cook of Duke University and John MacDonald of the University of Pennsylvania compares crime rates in 30 “business improvement districts” set up in Los Angeles after 1995 with those in neighboring districts. BIDs tend to be high-crime areas, so the authors adjust for this. They find that each $10,000 spent by an average BID resulted in 3.4 fewer crimes per year.

To work out whether this was money well spent, the authors surveyed the public to put a cash value on each crime prevented. People were asked whether they would vote for a scheme that reduced a particular crime by 10 percent at a particular cost in tax dollars (the range of “offers” varied from $25 to $225). The authors calculate that preventing a robbery is valued at $263,000, an assault at $79,000 and a burglary at $21,000. Given the reduction they bring about in each sort of crime, every $10,000 spent by the average BID bought some $200,000-worth of crime prevention. Why is private security apparently so cost-effective? One reason, says Cook, is simply that guards are paid less than police officers.

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