Private Protection Against Crime and Public Policing : Political Economy Considerations

Private protection and public policing interact in the fight against property crime. While property owners tailor their level of private protection to their property value, the level of public policing is chosen by elected officials for society as a whole. When the median voter's property is less valuable than the average property value, the equilibrium level of public policing is excessive (too small), compared to the level that maximizes the collective welfare of property owners, when private protection and public policing are substitutes (complements); but this relationship can be reversed when offenders' utilities are included in the social welfare function