How policing incentives affect crime, measurement, and justice

In this paper we develop a model where the police choose between investigating and patrolling, while civilians choose between producing and stealing. We derive a truth table for the equilibrium numbers of criminals and producers, punished or not, that can holistically evaluate the effects of police performance incentives. To test the model, we conduct an experiment that varies how severely an officer is reprimanded for false punishments. We find that stronger reprimands do not change crime, increase civilian incomes, and decrease false positives. We also find that the clearance rate, a measure of performance used widely in econometric studies, suggests police performance is better when it is unambiguously worse.