Underground Gun Markets

This article provides an economic analysis of underground gun markets, drawing on interviews with gang members, gun dealers, professional thieves, prostitutes, police, public school security guards and teenagers in the city of Chicago, complemented by results from government surveys of recent arrestees in 22 cities, plus administrative data for suicides, homicides, robberies, arrests and confiscated crime guns. We find evidence that transactions costs are considerable in the underground gun market in Chicago, and to some extent in other cities as well. The most likely explanation is that the underground gun market is both illegal and 'thin'- relevant information about trading opportunities is scarce due to illegality, which makes search costly for market participants and leads to a market thickness effect on transaction costs. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.

Effects of State-Level Firearm Seller Accountability Policies on Firearm Trafficking

Criminals illegally obtaining firearms represent a great risk to many urban residents. This cross-sectional study of 54 US cities uses data on state laws governing gun sales, a survey of law enforcement agencies’ practices to promote compliance with gun sales laws, and crime gun trace data to examine associations between these policies and practices with gun trafficking indicators. Higher levels of local gun ownership were linked with greater intrastate gun trafficking. Regression models estimate that comprehensive regulation and oversight of gun dealers and state regulation of private sales of handguns were each associated with significantly lower levels of intrastate gun trafficking. Discretionary permit-to-purchase licensing laws’ negative association with intrastate trafficking disappeared when local gun ownership is controlled. The effects of these relatively restrictive gun purchase laws on trafficking may be mediated by the laws’ lowering of gun ownership. Relatively low prevalence of gun ownership may also be a prerequisite for passage of discretionary purchase. We observed no effect on intrastate trafficking of laws limiting handgun sales to a maximum of one per person per month