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Does private security affect crime?: a test using state regulations as instruments

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  • Brian Meehan
  • Bruce L. Benson

Abstract

Private security is employed to deter criminals from attacking specific targets, presumably not to produce general deterrence. Indeed, private security generates negative spillovers as criminals substitute non-protected targets for protected targets. Specific deterrence efforts may generate positive spillovers too, however, by raising the expected cost of committing crimes, thereby reducing crime in an area. The hypothesis that private security deters crime at the state level is tested. The demand for private security in an area is expected to be simultaneously dependent on the level of crime; so, an instrumental variables approach is employed in a panel-data fixed-effect model using state-level data from 1998 to 2010. Instruments for the amount of private security are state-wide licensing regulations for firms specializing in providing security, since these regulations should influence entry. Some state-level measures of violent and property crime are shown to be negatively and significantly related to increases in private security, suggesting that private security generates a general deterrence effect.

Suggested Citation

  • Brian Meehan & Bruce L. Benson, 2017. "Does private security affect crime?: a test using state regulations as instruments," Applied Economics, Taylor & Francis Journals, vol. 49(48), pages 4911-4924, October.
    • Handle: RePEc:taf:applec:v:49:y:2017:i:48:p:4911-4924
    DOI: 10.1080/00036846.2017.1296551
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    Citations

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    Cited by:

    1. Brian Meehan, 2017. "Do Economies of Scale Exist in Private Protection? Evaluating Nozick's "Invisible Hand"," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 32(Summer 20), pages 83-91.
    2. Zhe Song & Chen Hao, 2022. "Housing price and criminal crime in China: direct and indirect influence," Applied Economics, Taylor & Francis Journals, vol. 54(40), pages 4647-4663, August.
    3. Bruce L. Benson, 2015. "Regulation As a Barrier to Market Provision and to Innovation: The Case of Toll Roads and Steam Carriages in England," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 30(Spring 20), pages 61-87.
    4. Brian Meehan & Bruce Benson, 2015. "The occupations of regulators influence occupational regulation: evidence from the US private security industry," Public Choice, Springer, vol. 162(1), pages 97-117, January.
    5. Blackstone, Erwin A. & Hakim, Simon & Meehan, Brian, 2020. "Burglary reduction and improved police performance through private alarm response," International Review of Law and Economics, Elsevier, vol. 63(C).
    6. Luis Raúl Rodríguez-Reyes, 2018. "A Model of the Indirect Effect of Crime on the Demand for Money," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 13(4), pages 571-584, Octubre-D.
    7. Glenn Scheerlinck & Caroline Buts & Marc Cools & Genserik Reniers, 2020. "The impact of regulation on private security industry dynamics," European Journal of Law and Economics, Springer, vol. 50(2), pages 223-240, October.
    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.

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