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Crime protection investment spillovers: Theory and evidence from the City of Buenos Aires

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  • Amodio, Francesco

Abstract

This paper studies spillover effects from private crime protection technologies. Criminals and victims interact in a frictional market for offenses. Private protection diverts crime towards unprotected targets, but also discourages criminal activity. The relative strength of these two effects determines the sign of externalities among potential victims. Using originally collected data from Buenos Aires, evidence shows that (i) private protection investment is spatially concentrated, and (ii) neighbors’ investment in private protection has a causal positive and significant effect on own investment. To achieve identification, I exploit variation in the investment status of close neighbors as induced by their knowledge of crimes targeting friends, relatives, acquaintances or others, and occurred farther away. Neighbors’ investment in alarms and cameras significantly increases a household's propensity to invest in the same technology. Externalities raise the scope for government intervention, while geo-referenced information on private protection can inform policy with regard to the spatial distribution of policing effort and public investment in security.

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  • Amodio, Francesco, 2019. "Crime protection investment spillovers: Theory and evidence from the City of Buenos Aires," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 626-649.
    • Handle: RePEc:eee:jeborg:v:159:y:2019:i:c:p:626-649
    DOI: 10.1016/j.jebo.2017.03.023
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    Cited by:

    1. Ross Hickey & Steeve Mongrain & Joanne Roberts & Tanguy van Ypersele, 2021. "Private protection and public policing," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(1), pages 5-28, February.
    2. Di Tella, Rafael & Freira, Lucía & Gálvez, Ramiro H. & Schargrodsky, Ernesto & Shalom, Diego & Sigman, Mariano, 2019. "Crime and violence: Desensitization in victims to watching criminal events," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 613-625.
    3. Li, Lixing & Liu, Kevin Zhengcheng & Nie, Zhuo & Xi, Tianyang, 2021. "Evading by any means? VAT enforcement and payroll tax evasion in China," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 770-784.
    4. Salm, M. & Vollaard, B.A., 2014. "Individual Perceptions of Local Crime Risk," Discussion Paper 2014-072, Tilburg University, Center for Economic Research.
    5. Vikram Maheshri & Giovanni Mastrobuoni, 2018. "Do Security Measures Displace Crime? Theory and Evidence from Italian Bank Robberies," Carlo Alberto Notebooks 579, Collegio Carlo Alberto.
    6. Salm, M. & Vollaard, B.A., 2014. "Individual Perceptions of Local Crime Risk," Discussion Paper 2014-044, Tilburg University, Tilburg Law and Economic Center.
    7. Mirzaoglu, Gulbike, 2023. "Essays in economics of crime prevention and behavior under uncertainty," Other publications TiSEM 2365661f-9f4d-4511-ad2f-6, Tilburg University, School of Economics and Management.
    8. Francis Petterini & Akauã Flores, 2021. "Copula econometrics to simulate effects of private policing on crime," Economics Bulletin, AccessEcon, vol. 41(3), pages 1241-1254.
    9. Corvalan, Alejandro & Pazzona, Matteo, 2022. "Inequality, crime and private protection," Economics Letters, Elsevier, vol. 210(C).

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