Have only have a few citations to indent? Place your cursor at the first line you want to indent and hit Ctrl-T.
Here's how to create hanging indents for all your citations at one time using Word 2010:
- Select the citations to format.
- From the Home ribbon, click the paragraph arrow to open the paragraph dialog box.
- Under Indentation, choose Special.
- Select Hanging and set the indentation by 0.5"
Here's a quick video that shows the steps: