Do Police Deter Crime: A Granger Causality Analysis of London’s Boroughs

Abstract

Recent changes to the budget in London has cut funding to the Metropolitan Police Service. The outcome of these spending cuts is that the local government plans to shut down majority of the police stations in London and this will result in a smaller police force across the city. The decision to leave just one police station per borough, baring a couple exceptions, irrespective of the relative crime rates shows that the change in police levels is exogenous to crime. This paper analyses how police levels have affected crime rates in London’s 32 boroughs from 2004 to 2016 using the variation in police per capita in each borough to determine the impact on crime rates in that area through a Granger causality test. The results of this paper find that police levels have had a significant effect on crime rates in London with an elasticity of -0.203. This is through its substantial impact on non-violent crimes, with an elasticity of -0.226, as the effect of police levels on violent offenses was not significant.