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Combining micro and macro data, we construct demand-side shocks, which we take to be exogenous for individual firms. We estimate a reduced-form model to describe how firms adjust their production, employment, capital stock, and inventories in response to such shocks. Then, we chose the...
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We present evidence that more ethnically fragmented communities spend, all else equal, more on police services than … less fragmented communities. We introduce a model of spending on police services which we use to interpret the data. In … spending on police services reduces the attractiveness of committing a crime. We also assume that being a victim of crime …
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Using a Two-Stage Least Squares procedure, we estimate the relationship between ethnic fragmentation and police … and accounting for simultaneity bias, ethnic fragmentation is positively related to police spending. Our paper contributes … to the understanding of the stylized fact that public spending on police increased over a period in which the incidence …
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