Economist's Notebook: More Guns, More Crime

Taking a break from the stimulus debate...

The tragic events that occurred in downtown Portland last Saturday night made me think about a very controversial debate to which economists have made major contributions: does gun ownership promote or deter crime?

For sure, someone like Erik Ayala who chooses to take his own life and others' has many means at his disposal.  But easy access to guns (excuse the economics parlance) lowers the cost of doing so.  So, does it matter?  Does a mentally disturbed individual respond to economic incentives?  And does the high incidence of gun ownership increase the cost of crime enough to counter the lower cost of procuring a gun?  

The answers to the particular questions about Ayala are never going to be clear, but what can we say about guns and crime on average?  For sure it is a complicated question to answer because crime and gun ownership are highly correlated: guns are bought to commit crimes, and guns are also bought because crimes are being committed (and guns are bought for many other reasons as well).  How do we say something about the causality of the effect of gun ownership on crime?   

One thing we can't do is look at correlations: the fact that gun ownership and crime are positively correlated tells us nothing about the causal link.  So what economist Mark Duggan did, in his groundbreaking paper "More Guns, More Crime" was to find something that is correlated with gun ownership, but uncorrelated with unexplained variation in crime.  In his case he looks at subscriptions to gun magazines.  This is plausibly correlated with gun ownership and unrelated to unexplained variation in homicide rates.  Using these data to instrument for gun ownership he finds that gun ownership is significantly positively related to the homicide rate - almost exclusively related to homicides committed with a gun.  Ayres and Donohue have also examined the evidence on concealed weapons laws and found that the evidence is mixed, but the bulk of the evidence suggests that, if anything, concealed carry laws increase the incidence of crimes. 

Is the debate over?  No, absolutely not.  But the received empirical evidence gives one pause and suggests that tougher gun ownership laws may indeed reduce gun homicides. 

Economist's Notebook: Cost Disease and the Decline of Burglaries

NPR recently did a story on the decline in Burglaries in the United States. They interviewed a reformed burglar who said that people don't keep cash around anymore and that the increase in alarms means it is a bigger hassle, but the thing that stuck out to me was the statement that you can't sell stuff for anything anymore. It used to be that you could steal some electronics and make some quick cash, but when a new DVD player can be had at Wal-Mart for $50, how much would a stolen one fetch on the street? Close to zero.

When I was the victim of a burglary at my old apartment at NW 23rd and Glisan in Portland (this was long ago when the area was hip and cool, way before the gentrification that exists now), the thief took the only things of any value in my apartment: my VCR and my SLR camera. These would be absolutely worthless now and the whole endeavor would be pointless.

Over at Marginal Revolution, Tyler Cowan notes that economics actually predicts this phenomenon - through an idea known as Baumol's cost disease (and once again MR steals my ideas, and yet somehow before I write about them - I have to keep the tinfoil on my head!). The basic idea of cost disease it that there are some things that we naturally don't see much productivity gains through time (Baumol's example was a symphony orchestra) while in many other areas (consumer electronics for example) we do. This helps explain why the cost of tuition at a university keeps rising faster than inflation - I am not that much more productive than a professor 100 years ago when it comes to the hard work of teaching and learning (though as a researcher I am, but tuition is reflective of the teaching part and my research is an externality). What is becoming relatively more valuable through time, therefore, are services, like teaching college students economics, but these cannot be captured by a burglar very easily.

So cheap overseas labor is apparently putting burglars out of work as well. What is a poor meth-head to do? Apparently more and more identity theft.