How Policing Incentives Affect Crime, Measurement, and Justice

Abstract

We develop a model where the police face a trade-off between investigating and patrolling, while civilians choose between producing and stealing. The equilibrium numbers of criminals and producers, punished or not, are summarized in a truth table of criminal justice. High-powered police incentives affect all elements of the table, and can have non-monotone effects on crime while increasing both the clearance rate and false positives. We report an experiment that varies how severely an officer is punished for false punishments and find that stronger reprimands do not change crime but do cause civilian incomes to increase and false positives to decrease. The clearance rate, however, is also decreasing with stronger reprimands, which suggests the police performance is better when in fact it is worse.

Keywords: police incentives, crime, truth table of criminal justice

JEL Classification: C7, J1, K4