Freeman

ARTICLE

Why Crime Declines

Private Security Has Increased Dramatically as Crime Rates Have Fallen

JANUARY 01, 2000 by BRUCE BENSON

Bruce Benson is De Voe Moore Distinguished Research Professor in the department of economics at Florida State University and author of To Serve and Protect: Privatization and Community in Criminal Justice (New York University Press, 1998).

Crime in America has fallen since 1991. In that year, the reported crime rate compiled in the FBI’s Uniform Crime Reporting program peaked at 5,897.8 per 100,000 population. Then it dropped almost continuously, reaching 4,922.7 in 1997. Preliminary statistics for 1998 indicate a 7 percent drop below the ‘97 figure. (Monthly statistics suggest that the trend continued in 1999.)

Why? Politicians have ready answers. They claim credit through their support of prison construction, longer mandated sentences, greater police funding, and so on. They also claim credit for the strong economy and low levels of unemployment, which reduce the incentives to commit property crimes. Police point to their efforts in the war on drugs or to innovations in policing strategies such as “community policing.” Criminologists cite many of these same causes, along with the changing age distribution of the population: the number of crime-prone young males has been shrinking thanks to aging and reduced birth rates.

No doubt many and probably all of these things work together to help explain falling crime rates, but there is another, perhaps even more important factor that has gone largely unnoticed. Private citizens have responded to the fear of crime by investing increasing amounts of their own time and money in crime prevention.

Private-sector responses to crime have taken many forms, including crime watch and other types of neighborhood or building watching, patrolling and escort arrangements, installation of alarms and other detection devices, improved locks and lighting, investments in self-protection such as martial-arts training and guns, and employment of private security personnel. All these activities have been increasing dramatically as crime rates have fallen. Information on these activities is relatively scarce, but a number of studies conducted over the years give some indication of the trends.1 Consider private security markets, for example.

Crime rates have actually been trending down since 1980 (after fluctuating through the 1970s) except for the upturn in 1985-91, during a dramatic change in criminal-justice policy nationwide.2 There were 5,950 reported crimes per 100,000 population in 1980 versus 5,175.3 in 1984.

Private security employment has accelerated since 1970. A 1970 estimate put the number of privately employed security personnel in the United States at roughly equal to the number of government, or public, police. Since then, public police employment, unlike private security employment, has not changed much. In 1990 there were roughly 2.5 private security personnel (about 1.5 million total) to every public police officer.3 This ratio is rapidly approaching 3 to 1, if it has not already reached that level.4 Thus, in 1990 an estimated $52 billion was spent for private security services in the United States compared to about $30 billion for federal, state, and local police.5

The private security market apparently is the second fastest growing industry in the United States,6 but increasing employment of private security personnel is only part of the story. Going back to 1970 again, a study found that the use of security equipment was increasing at about 11 percent per year,7 but the growth rate in expenditures on security equipment reached an estimated 15 percent in 1990 when they rose to an estimated $17 billion.8

Provision of residential alarm systems (already the most frequently used component of security programs for business) provides one example of the spread of such security technology. It is estimated that at least 10 percent of the homes in the United States were connected to central alarm systems in 1990,9 up from one percent in 1970.10 One estimate by Leading Edge Reports suggests that total sales of central alarm station services rose by 36.9 percent (from $5.26 million to $7.20 million) between 1987 and 1989 (during the upsurge in the war on drugs).11

While statistics are not readily available, it appears that this trend has accelerated through the 1990s. But these services are only one of many aspects of the security market that rely on technology rather than or in addition to manpower. Electronic access control equipment sales grew by an estimated 23 percent between 1987 and 1989, while increases in sales of electronic intrusion detection equipment, vehicle protection equipment, and closed-circuit television (CCTV) were 21, 44, and 25 percent respectively, and growth rates for sales of metal detectors, x-ray devices, computer security equipment, electronic article surveillance equipment, and other types of security technology are all comparable.12

Better Technology

It is not just numbers and expenditures that are rising. Both increasingly sophisticated labor and capital are being combined to produce ever higher levels of security where it is demanded. The last three to four decades have witnessed dramatic changes in security technology, with the arrival of CCTV, microwave detection systems, portable radios and cameras, magnetic sensors, and laser technology, to name a few. And all these technologies are constantly being improved; devices that were on the cutting edge only a short time ago are obsolete. As a salesman explained to me, firms have to continue to improve products because thieves figure out how to circumvent security devices. Beyond that, they have to keep pace with new and vigorous competition.

Training for security personnel has had to improve dramatically to take advantage of the new technologies. Security personnel still include minimum-wage night watchmen, the stereotypical security from the 1950s and 1960s. But they also include highly trained and skilled electronic-security experts and security-design consultants, thanks to a growing demand for detection and deterrent equipment and price-cutting technological advances.

Given the demand for security and the increasing sophistication of many security personnel, it should not be surprising that entrepreneurs are discovering ways to supply a package of services that add up to more secure environments. Residential and business developments are increasingly being designed with security in mind. Enclosed malls and office complexes are attractive to businesses for many reasons, but security generally is part of the contract.

Apartments and condominiums often operate in a similar fashion. Such arrangements are apparently attractive: an estimated 24 million Americans lived in locked condominiums, apartment complexes, and cooperatives in 1997.13 Private residential communities, consisting of large numbers of single- and/or multiple-family homes on private streets, are increasingly being developed with security as a selling point. A 1997 estimate put the number of people in some 30,000 “gated” communities at around eight million, with a half-million in California alone.14

The Results

Studies of the consequences of private-sector crime control activities are rare, but several informative ones exist. A study done in the mid-1980s examined the activities and consequences of the private security force in Starrett City, a 153-acre complex in a high-crime area of Brooklyn, with 56 residential buildings containing 5,881 apartments and about 20,000 racially and ethnically diverse but largely middle-income residents.15 Starrett City had only 6.57 reported crimes per 1,000 population, compared to 49.86 for the 75th precinct in which Starrett City is located. This is all the more remarkable, considering that Starrett City residents are much more likely to actually report crimes to their security personnel than citizens in general are. (Victimization surveys indicate that more than 60 percent of crimes with victims go unreported.16)

Similar results appear elsewhere. For instance, one of the most intriguing cooperative privatization schemes in recent history is in St. Louis and University City, Missouri.17 In 1982 the St. Louis metropolitan area had more than 427 private street-providing organizations.18 The titles to these formerly public streets are now vested in incorporated street associations to which all property owners must belong and pay dues. The street associations, most of which own one or two blocks, have the right to close their streets to through-traffic to limit cars to those of residents and their visitors. More important, ownership gives the neighborhood a high degree of cohesiveness, and the resulting cooperative behavior produces an increased awareness of activities on the streets. That along with limited access and, in a few cases, security patrols significantly lowered crime in virtually every category relative to comparable public streets. For instance, Ames Place’s crime rate was 108 percent lower than the adjacent public street.19

Smaller scale private security arrangements are also effective. Critical Intervention Services (CIS) provides private security to landlords who own apartment complexes priced to attract low-income tenants. Since CIS began offering service in Tampa, Florida, in 1991, it has received many more requests than it can serve, but it has expanded into Miami, Jacksonville, and Orlando. Revenues grew from $35,000 to roughly $2 million in 1996. The firm provided security for 50 apartment complexes that year, and crime dropped by an average of 50 percent.20

Private security and protection arrangements also can have a general deterrence effect. A 1996 analysis of Lojack, a hidden radio transmitter installed in cars to aid in recovery after theft, concluded that a 1 percentage point increase in installations is associated with a 20 percent decline in auto thefts in large cities and a 5 percent reduction in the rest of the state.21

Lojack greatly reduces the expected loss for car owners who use it, since 95 percent of the cars equipped are recovered, compared to 60 percent for cars without it. But this direct benefit is only part of the total benefit. Because a potential car thief does not know if a vehicle is protected by Lojack, its existence in a market creates uncertainty that deters auto thefts. According to the study, “Lojack appears to be one of the most cost-effective crime reduction approaches documented in the literature, providing a greater return than increased police, prisons, job programs, or early education interventions.22 A recent extensive study of concealed handguns reaches similar conclusions; violent crimes, including murder, rape, and robbery, are significantly deterred when potential criminals know that citizens may carry concealed handguns.23

Public vs. Private Police

A comprehensive 1992 statistical study used data from 124 Standard Metropolitan Statistical Areas in an effort to analyze the effect of both public police and private security on the overall safety of communities and on decision-making by offenders.24 The addition of public police showed no statistically significant deterrence, but the result of private security was significant. Additional private security personnel correlated with less crime, suggesting that the benefits spill over into the community at large.

Public police may not like this finding, but they are increasingly recognizing its validity as they turn to “community policing” arrangements. In Chicago, for instance, the police department is implementing a massive change in its policing strategy, abandoning the “traditional” model of policing that relies on random automobile patrols, rapid response, forensic technology in after-the-crime investigations rather than citizen information, and a focus on arrest and incarceration.25 The new Chicago Alternative Policing Strategy emphasizes the need for community involvement in a “proactive” effort to prevent crime. While the program is relatively new, the intentions are to help develop local citizen and business crime-watch groups and to put public police back on the beat in large part to establish cooperative relationships with the people in neighborhoods. This is what private security often does. In fact, noted criminologist Lawrence Sherman defines community policing as police acting like security guards. So another consequence of the growing private response to crime is that it is providing public police with an alternative model.26

A massive 1976 report by the National Advisory Commission on Criminal Justice Standards and Goals concluded that “the private security industry.., offers a potential for coping with crime that can not be equaled by any other remedy or approach …. Not represented on the boards or staffs of State Planning Agencies, rarely used by municipal or county planners, only infrequently consulted by elected officials, [this] . . . industry [has] crime prevention answers desperately needed by homes, schools, businesses, neighborhoods and communities.”27 Even though politicians have rarely recognized, and crime researchers are only beginning to recognize, how accurate this study’s conclusion is, private citizens clearly know it already. The results are becoming increasingly apparent. They and the private entrepreneurs who respond to their demands deserve much of the credit for falling crime rates, despite the politicians’ assertions that they are responsible.


Notes

  1. See Bruce L. Benson, To Serve and Protect: Privatization and Community in Criminal Justice (New York: New York University Press, 1998), pp. 75-127.
  2. The upsurge in crime during this period resulted from a rapid shift for public police and prisons from property and violent crimes to drug crimes; fewer police were available to deter nondrug crimes, and prison crowding increased as drug criminals flowed in, forcing the early release of nondrug criminals; responses by the private sector and by legislators (for example, prison building) took time. Thus the general downward trend was not re-established until 1991. See Bruce L. Benson, Iljoong Kim, and David W. Rasmussen, “Deterrence and Public Policy: Tradeoffs in the Allocation of Police Resources,” International Review of Law & Economics, 1998, pp. 77-100; Benson, Kim, Rasmussen, and Thomas W. Zuehlke, “Is Property Crime Caused by Drug Use or Drug Enforcement Policy?” Applied Economics, 1992, pp. 679-692; and Rasmussen and Benson, The Economic Anatomy of a Drug War: Criminal Justice in the Commons (Lanham, Md.: Rowman and Littlefield, 1994).
  3. William C. Cunningham, John J. Strauchs, and Clifford W. Van Meter, “Private Security: Patterns and Trends,” National Institute of Justice: Research in Brief(Washington, D.C.: U.S. Department of Justice, 1991).
  4. Morgan O. Reynolds, Using the Private Sector to Deter Crime (Dallas, Tex.: National Center for Policy Analysis, 1994).
  5. Cunningham, et al.
  6. Office of International Criminal Justice, Readings distributed at the Ninth Annual Futures Conference for the program on “Privatization in Criminal Justice: Public and Private Partnerships,” University of Illinois at Chicago, March 13-15, 1995.
  7. Predicast, Inc., Special Study 56 (Predicast, Inc. 1970).
  8. Robert J. Fischer and Gion Green, Introduction to Security, 5th edition (Boston: Butterworth-Heinemann, 1992), p. 460.
  9. Reynolds, p. 8.
  10. William C. Cunningham and Todd H. Taylor, Crime and Protection in America: A Study of Private Security and Law Enforcement Resources and Relationships (Washington, D.C.: U.S. Department of Justice, 1985).
  11. Fischer and Green, p. 17.
  12. Ibid.
  13. David Boaz, Libertarianism: A Primer (New York: Free Press, 1997), p. 267.
  14. John Jay College of Criminal Justice/CUNY, “Gated Enclaves Are Not Just for the Well- Heeled,” Law Enforcement News, May 15, 1997, p. 5.
  15. Edwin J. Donovan and William F. Walsh, An Evaluation of Starrett City Security Services (University Park, Pa.: Pennsylvania State University, 1986).
  16. Bureau of Justice Statistics, Highlights from 20 Years of Surveying Crime Victims: The National Victimization Survey, 1973-1992 (Washington, D.C.: U.S. Department of Justice, 1993).
  17. Oscar Newman, Community of Interest (Garden City, N.Y.: Anchor Press, 1980).
  18. Fred Foldvary, Public Goods and Private Communities: The Market Provision of Social Services (Aldershot, England: Edward Elgar Publishing, 1994).
  19. Newman, pp. 137, 140.
  20. Joseph N. Boyce, “Landlords Turn to Commando Patrol,” Wall Street Journal, September 18, 1996, pp. B1-B2.
  21. lan Ayres and Steven D. Levitt, “Measuring Positive Externalities from Unobservable Victim Precaution: An Empirical Analysis of Lojack,” No. 197, John M. Olin Center for Law, Economics, and Business Discussion Paper Series, Harvard University, September 1996.
  22. Ibid., p. 30.
  23. John R. Lott, Jr., More Guns, Less Crime: Understanding Crime and Gun-Control Laws (Chicago: University of Chicago Press, 1998).
  24. Edwin W. Zedlewski, “Private Security and Controlling Crime,” in Privatizing the United States Justice System: Police Adjudication and Corrections Services from the Private Sector, ed. G.W. Bowman, S. Hakim, and P. Seidenstat (Jefferson, N.C.: McFarland & Company, 1992).
  25. Chicago Police Department, Together We Can: A Strategic Plan for Reinventing the Chicago Police Department (Chicago: Chicago Police Department, October 1995).
  26. Lawrence W. Sherman, “The Police,” in Crime, ed. James Q. Wilson and Joan Petersillia (San Francisco: Institute for Contemporary Studies Press, 1995).
  27. National Advisory Commission on Criminal Justice Standards and Goals, Private Security: Report of the Task Force on Private Security (Washington, D.C.: U.S. Department of Justice, 1976).

ASSOCIATED ISSUE

January 2000

comments powered by Disqus

EMAIL UPDATES

* indicates required

CURRENT ISSUE

November 2014

It's been 40 years since F. A. Hayek received his Nobel Prize. His insights, particularly on the distribution of knowledge and the impossibility of economic planning, remain hugely important today. In this issue, we look back on the influence of his work. Max Borders and Craig Biddle debate whether liberty must be defended from one absolute foundation, further reflections on Scottish secession, and how technology is already changing our world for the better--including how robots, despite the unease they cause, will only accelerate this process.
Download Free PDF

PAST ISSUES

SUBSCRIBE

RENEW YOUR SUBSCRIPTION