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“The Economics Of Gun Control”: Quantifying The External Costs Of Gun Ownership

After the school massacre in Newtown, everyone has been putting out proposals for how to reduce gun violence. President Obama created an inter-agency task force. The NRA asked for armed guards in every school. And now economists are weighing in with their own, number-heavy approaches.

First, here’s a recent paper (pdf) by Duke’s Philip Cook and Georgetown’s Jens Ludwig trying to quantify the “external cost” of gun ownership. The two economists wanted to figure out precisely what sorts of costs gun owners impose on the rest of society.

That’s not an easy question to answer. For starters, there aren’t even airtight estimates of how many people actually own guns in the United States. So Cook and Ludwig created a data set that used the number of suicides by firearm in a county as a proxy for gun ownership — and checked it against a variety of existing survey data.

The next step was to figure out the “social cost” of owning a gun. The two economists determined that a greater prevalence of guns in an area was associated with an increase in the murder rate, but not other types of violent crimes (guns, the authors argue, lead to “an intensification of criminal violence”). Why does this happen? One possibility: The two economists found evidence that if there are more legal guns in an area, it’s more likely that those guns will be transferred to “illegal” owners.

When the two economists added up the costs of gun ownership—more injuries and more homicides—and weighed them against various benefits, they concluded that the average household acquiring a gun imposed a net cost on the rest of society of somewhere between $100 to $1,800 per year. (The range depends on the assumptions used—and note that they are not including the increased risk of suicide that comes with owning a gun.)

Now, normally when economists come across a product that has a negative externality—like cigarettes or coal-fired plants—they recommend taxing or regulating it, so that the user of the product internalizes the costs that he or she is imposing on everyone else. In this case, an economist might suggest slapping a steeper tax on guns or bullets.

Others might object that this isn’t fair. There are responsible gun owners and irresponsible gun owners. Not everyone with a gun imposes the same costs on society. Why should the tax be uniform? And that brings us to John Wasik’s recent essay at Forbes. Instead of a tax on guns, he recommends that gun owners be required to purchase liability insurance. Different gun owners would pay different rates, depending on the risks involved:

When you buy a car, your insurer underwrites the risk according to your age, driving/arrest/ticket record, type of car, amount of use and other factors. A teenage driver behind the wheel of a Porsche is going to pay a lot more than a 50-year-old house wife. A driver with DUI convictions may not get insurance at all. Like vehicles, you should be required to have a policy before you even applied for a gun permit. Every seller would have to follow this rule before making a transaction.

This is where social economics goes beyond theory. Those most at risk to commit a gun crime would be known to the actuaries doing the research for insurers. They would be underwritten according to age, mental health, place of residence, credit/bankruptcy record and marital status. Keep in mind that insurance companies have mountains of data and know how to use it to price policies, or in industry parlance, to reduce the risk/loss ratio.

Who pays the least for gun insurance would be least likely to commit a crime with it.An 80-year-old married woman in Fort Lauderdale would get a great rate. A 20-year-old in inner-city Chicago wouldn’t be able to afford it.

Gun insurance for gun owners does exist right now, but it isn’t required — as Wasik notes, only 22 cities even require gun dealers to carry liability insurance. And, yes, under this proposal, people would no doubt still acquire guns illegally and evade the insurance requirements.

Granted, this proposal isn’t likely to garner much political support — even the Illinois state legislature, which has often looked favorably on gun-control laws, swatted a gun-insurance bill down pretty quickly in 2009. It might not get past the Supreme Court. And over at the Daily Beast, Megan McArdle outlines a number of other possible problems with having states require individual gun insurance. Still, it’s another way of thinking about the costs of gun ownership.


By: Brad Plummer, The Washington Post Wonkblog, December 28, 2012

December 30, 2012 Posted by | Gun Violence, Guns | , , , , , , , | Leave a comment

“A Real Plan B”: Pay For NRA’s Armed Guard Plan With A Gun Tax

After a week of radio silence after the Sandy Hook massacre, the National Rifle Association resurfaced today with a predictable solution to protecting the nation’s schoolchildren from gun violence: More guns.

At a press conference, NRA Executive Vice President Wayne LaPierre proposed putting an armed police officer in every school in the nation, to guard against the “unknown number of genuine monsters” that he says are waiting for their chance to mount a similar assault. “With all the foreign aid, with all the money in the federal budget, we can’t afford to put a police officer in every school?” asked LaPierre.

LaPierre says an armed presence on school grounds actually would provide what he touts as “absolute protection” against an attack—a shaky assumption, considering that Columbine High School had an armed county sheriff’s deputy on the campus when it was attacked by two teenage gunmen in 1999, and he was unable to prevent them from killing a dozen students and a teacher, and injuring 21 others.

But let’s assume that LaPierre is right, and that putting an armed officer in each of the nation’s 132,183 public and private schools would make schools safer. How would we fund it? According to the federal Bureau of Justice Statistics, the nation has 461,000 local police officers, but they already have plenty of responsibilities to keep them busy, and it’s hard to imagine police departments allocating more than a quarter of their personnel to watching over schools. So clearly, we’d have to recruit, hire, equip and train more officers for the job. According to the agency, the average total operating cost of each officer—including salary, benefits, equipment, and training—is $116,500.

That means that the NRA’s proposal would cost taxpayers about $15.4 billion annually.

I know that LaPierre doesn’t think that’s a lot of money compared to what we spend on foreign aid, but in fact, it is well more than any item in the foreign aid budget. According the State Department’s FY 2013 fact sheet, the cost of providing an armed officer to every school in the nation would amount to five times what we provide in military assistance to Israel ($3.1 billion in 2012), and nearly four times the $4 billion that we spend on humanitarian assistance to war refugees and victims of natural disasters. It would amount to 15 times what we spend to support the United Nations and other international organizations.

So we’re talking about a lot of bucks here, especially at a time when federal taxes seem almost certain to go up for most Americans in 2013. Is it fair that the majority—70 percent of Americans, according to this 2011 survey—who don’t own guns should pay higher taxes to support the NRA’s idea, because of LaPierre’s insistence that gun control laws are unfair to gun owners?

I say no. Instead, here’s a counter-proposal. Let’s tax gun purchases to subsidize the cost of the NRA’s school security proposal. Gun owners bought 10.8 million firearms in 2011, according to Ammoland, a website for gun enthusiasts. At a surcharge of, say, $1,425 per weapon, we’d have enough to provide the absolute protection that LaPierre wants. We might be able to lower that a bit by adding additional taxes to ammunition as well.


By: Patrick Kiger, U. S. News and World Report, December 21, 2012

December 23, 2012 Posted by | Guns, Public Safety | , , , , , , , | 2 Comments


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