it's different in small towns with less cars/pedestrians around. it's a judgement call. usually by a supervisor who is not on scene. the cops in the pursuit never want to be called off.
I am totally against car chases unless it is for a major crime. And I do not consider vehicle theft to be a major crime, as the perp is never punished severely for it. It is not worth risking the lives of law-abiding citizens in order to apprehend someone who has committed a wrist-slapping offense.
A few years ago, some innocents were killed here in Houston as police chased a car thief, and a few weeks ago, the police engaged in a major chase of a guy who had run a red light.