IN THE POSITIVE ANALYSIS, IT IS ARGUED THAT PRIVATE PROTECTION MAY REDUCE A HOUSEHOLD'S EXPECTED VICTIMIZATION RATE BY DETERRING SOME CRIME ALTOGETHER OR MERELY DIVERTING CRIME TO OTHER HOUSEHOLDS. THE MORE IMPORTANT THIS DISPLACEMENT EFFECT, THE MORE LIKELY A COMMUNITY IS TO 'TIP' IN THE DIRECTION OF DESERTING THE STREETS AT NIGHT AND TAKING OTHER PRECAUTIONS IN LARGE NUMBERS. EMPIRICAL FINDINGS PROVIDE ESTIMATES OF THE HOUSEHOLD RESPONSE TO CRIME, BUT NOT OF THE EFFECT OF PROTECTION ON CRIME RATES. THE NORMATIVE ANALYSIS INDICATES THAT THE GREATER THE RELATIVE IMPORTANCE OF SUCH A DISPLACEMENT EFFECT, THE MORE PRIVATE PROTECTION WILL TEND TO BE OVERSUPPLIED, FROM A SOCIAL VIEWPOINT. ALLOCATION WILL TEND TO BE IMPROVED THROUGH THE USE OF PUBLIC SECTOR PRICING WHICH REFLECTS THE EXTERNAL BENEFITS WHICH INDIVIDUALS PROVIDE FOR EACH OTHER IN MAINTAINING THE PUBLIC SAFETY. IN THE APPLICATION OF THIS ANALYSIS TO PUBLIC POLICY, HOWEVER, IT SHOULD BE EMPHASIZED THAT JUST AS THE FACTORS EFFECTING CRIME VARY, SO PRIVATE PROTECTIVE MEASURES HAVE A VARYING EFFECT ON CRIME RATES. BOTH ISOLATION AND DISPLACEMENT EFFECTS ARE MORE PRONOUNCED FOR MEASURES SUCH AS STAYING HOME OR AVOIDING PUBLIC TRANSPORTATION THAN FOR TURNING ON LIGHTS OR INSTALLING BURGLAR ALARMS. EFFECTS OF STAYING HOME OR AVOIDING PUBLIC TRANSIT ARE THE PROPER CONCERN OF PUBLIC POLICY. REFERENCES AND FOOTNOTES ARE PROVIDED. (AUTHOR ABSTRACT MODIFIED)