Public Order and Private Payments: Evidence from the Swedish Soccer League

Public Order and Private Payments: Evidence from the Swedish Soccer League. Sten Nyberg and Mikael Priks. Journal of Public Economics, September 2017, Pages 1-8, https://doi.org/10.1016/j.jpubeco.2017.07.005

Highlights
•    Private security at public events can be subject to free-riding and externalities.
•    Co-payments for police at events can improve incentives for organizers.
•    We examine a natural experiment with co-payments in the Swedish soccer league.
•    Results show that co-payments increase private security and reduce unruly behavior.

Abstract: Should organizers of events share the associated costs of maintaining public order? We address this question by using unique data from the Swedish soccer league where co-payment for police were introduced for some clubs only. The difference-in-differences analysis shows that co-payments increased private guards by 40 percent and suggests a reduction of unruly behavior by 20 percent. The results are consistent with our model, where co-payments alleviate under-provision in efforts by organizers to combat problems such as hooliganism due to exernalities and free-riding on police services. The model also sheds light on the critique that co-payments could lead financially constrained organizers to provide less security.