This analysis considers crime prevention as a commodity which is bought and consumed by individuals. Crime prevention generates what economists call an "externality," which is any effect on one party generated by a second party and which is not traded on the market. To the extent that crime displacement is not perfect, there will be a net benefit to society as a whole from individual acts of crime prevention. There is an incentive for householders to continue "buying" crime prevention until a point is reached where an additional pound spent on crime prevention will yield only one pound's worth of prevented crime to the householder. When the "externality" benefits of prevented crime are considered, however, an additional pound spent on crime prevention by the householder would yield one pound's worth of crime prevention to the householder plus the externality benefits, which involve significantly more than one pound in total social benefit. Individuals, neighborhood groups, and organizations will typically provide themselves with less crime protection than would be desirable for aggregate social welfare. Government's task is to reduce this inadequate provision by supporting the national effort of crime prevention. In undertaking this, government requires two sorts of information: the relative cost-effectiveness of various forms of crime prevention and the social cost of various types of crime. 4 references.