Microeconomics Seminar with Pat Bayer (Duke)

Abstract: We develop an empirical model of the mechanism used to assign police officers to districts in Chicago and use it to examine the efficiency and equity of alternative assignments. We first document that Chicago’s current bidding process, which grants priority based on seniority, results in the matching of more experienced officers to less violent and high-income neighborhoods. We next combine causal estimates of returns to officer experience on neighborhood crime with estimates of officer preferences for neighborhoods to study the welfare implications of the current and alternative designs. Counterfactual simulations imply that equalizing officer seniority across districts would reduce the overall violent crime rate in Chicago and significantly decrease inequality in crime across neighborhoods. We show that this assignment can be achieved in a way that is both revenue neutral and results in negligible welfare loss to police officers, implying that this allocation is not only more equitable but more efficient.

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