WITH POLICE BUDGETS CONSUMING A LARGER SHARE OF GOVERNMENT EXPENDITURES, GREAT PRESSURES EXIST TO EVALUATE POLICE EFFICIENCY. THE PROBLEM IS SELECTING AN OUTPUT TO BE MEASURED. SOME RESEARCHERS HAVE ATTEMPTED TO EQUATE POLICE ACTIVITY WITH APPREHENSION OF CRIMINALS, BUT THIS COMPLETELY IGNORES THE CRIME PREVENTION POTENTIAL OF DETERRENT ACTIVITIES. ANOTHER MEASURE SEEKS TO COMBINE PREVENTED CRIMES PLUS ARRESTS; THIS FAILS BECAUSE 'PREVENTED CRIMES' IS AN UNCERTAIN FIGURE. AS THIS FORMULA DETERMINES IT, PREVENTED CRIMES IS THE DIFFERENCE BETWEEN PREDICTED CRIMES AND ARRESTS. THIS FIGURE WAS FURTHER REFINED IN A LOS ANGELES STUDY BY INFORMATION FROM MOTORCYCLE POLICEMEN, FIELD OFFICERS, NONFIELD OFFICERS, AND DEPARTMENTAL CIVILIAN EMPLOYEES, EACH ESTIMATING CRIMES PREVENTED ON THE BASIS OF PAST EXPERIENCE AND KNOWN POTENTIAL CRIMINAL POPULATION. COSTS ARE EASIER TO OBTAIN. STILL, THE RESEARCHER MUST DECIDE WHETHER TO INCLUDE ONLY DAILY OPERATING COSTS OR TO ADD IN BONDED INDEBTEDNESS AND OTHER CAPTIAL COSTS. POLICE EXPENDITURE DETERMINATION RESULTS FROM A VARIETY OF SUPPLY AND DEMAND FUNCTIONS. THE APPENDIX DISCUSSES EXPENDITURE DETERMINATION BASED ON THE FORMULA E=M(P,Y,U) WHERE E IS TOTAL EXPENDITURE (WHICH DIFFERS FROM THE USUAL PER CAPITAL EXPENDITURE IN THAT IT CONTAINS A DIFFERENT POPULATION DETERMINATION), P IS POPULATION, Y IS PER CAPITAL INCOME, AND U IS DEGREE OF URBANIZATION. M IS THE OPERATING EXPENSE CONSTANT. WITH THIS EQUATION POLICE SUPPLY IS RELATED TO COMMUNITY DEMAND AND THE COMMUNITY'S ABILITY TO PAY FOR POLICE SERVICES. REFERENCES ARE PROVIDED.