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Public Finance


The comment by Pyle and Deadman [PD] on our paper deals with several points which arise regularly in empirical applications of economic theory and especially in applications in which "firms" do not operate in traditional market places. Their first point concerns the appropriate definition of output in law enforcement agencies: Is the final output deterrence of future crimes, solving existing crimes, both, or something else? PD argue that deterrence {crime prevention) is the primary output of law enforcement agencies, and from society's perspective, this is undoubtedly true. But as we attempted to make clear in our paper, we were interested in modeling the decision process of an individual agency. Conversations, both with academics working in the area of law enforcement and with practitioners, convinced us that on a day to day basis, police departments were much more likely to be interested in solving crimes than in deterrence.

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