Crime is an interesting topic of study. One of the interesting aspects of it is that when a deterrent to crime is put in place, crime may be reduced in the vicinity of the deterrent, but may increase elsewhere. For example, installing CCTV cameras on main streets may reduce night-time street robberies in the areas of the CCTV cameras, but only because the criminals relocate their activities to nearby streets where there are no CCTV cameras, leaving overall crime unchanged. That is referred to as 'displacement' of crime.
In an interesting application of this theory, a new article by Vikram Maheshri (University of Houston) and Giovanni Mastrobuoni (University of Torino) looked at the effect of the location of security guards on bank robberies in Italy. They use complete data on all registered banks in Italy over the period from 2000 to 2009, which includes details of 37 different security measures. They focus their attention on the hiring (or firing) of security guards, and how that affects the number of bank robberies at the hiring (or firing) bank, and at neighbouring banks (for a variety of different neighbourhood sizes ranging from 500m x 500m grid squares to 50km x 50 km grid squares).
Using this dataset, they find that:
In markets smaller than 1 km2, we find displacement effects of 1.5 to 2 percentage points to unguarded banks... Specifically, if an unguarded bank’s neighbors hires guards, the branch’s probability of being robbed will increase by roughly 20%. However, we find no statistically significant displacement effects to guarded banks... even in the smallest markets.
No surprises there. If a criminal is thinking about robbing a bank, they may prefer to find an unguarded nearby bank when they find that their original target is guarded. However, that creates a bit of a dilemma for a policymaker (or an owner of many bank branches). Should more security guards be hired, or fewer? Maheshri and Mastrobuoni simulate the effect of different policies requiring or prohibiting security guards. They show that:
In much of the country, banning guards would lead to no more than five additional robberies. However, in metropolitan areas, we might find much greater increases. For instance, Rome, Naples, Milan, and Palermo would experience more than fifty additional robberies...
If instead all banks were required by law to hire guards... the greatest reductions in robberies are concentrated in the most densely populated areas that feature the greatest number of potential targets. These include the relatively wealthy Po’ River valley in the north (which includes Milan, Turin, Bologna, and Venice) along with the major cities of Rome, Naples, Bari, and Florence...
Hiring a security guard is costly. A rational individual bank should only do so if the cost of the guard is outweighed by the benefits in terms of bank robberies prevented (measured by the losses from bank robberies that would be avoided). That is more likely in urban areas, where banks are larger and hold more cash. However, since hiring a security guard displaces bank robberies to nearby banks, an urban bank that hires a security guard creates a problem for its neighbour banks without guards. If some (many) banks have security guards, then it is better for all urban banks to have guards. So, requiring security guards in dense urban areas makes sense. On the other hand, security guards in sparsely populated rural areas make little sense, because they don't prevent many robberies and the cost of hiring them therefore outweighs the benefits. Since few banks will have security guards, then it is better for no rural banks to have guards.
The problem with this analysis is that it is based on observations of past behaviour, and that criminal behaviour may change in response to policy changes by the banks. In the data that Maheshri and Mastrobuoni use, most of the displacement in bank robberies is very local. However, if bank robbers recognise that all urban banks suddenly have security guards, but no rural banks do, then the displacement may suddenly shift from within local neighbourhoods to between urban to rural areas. This would lead to a much wider geographical displacement effect than has been observed in the past, and place the rural banks at greater risk.
[HT: Marginal Revolution, last year]
Read more:
No comments:
Post a Comment