Underground Gun Markets
AbstractThis paper 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 teens 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 of considerable frictions in the underground market for guns in Chicago. We argue that these frictions are due primarily to the fact that the underground gun market is both illegal and %u201Cthin%u201D -- the number of buyers, sellers and total transactions is small and relevant information is scarce. Gangs can help overcome these market frictions, but the gang%u2019s economic interests cause gang leaders to limit supply primarily to gang members, and even then transactions are usually loans or rentals with strings attached.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11737.
Date of creation: Nov 2005
Date of revision:
Publication status: published as Cook, P. J., J. Ludwig, S.A. Venkatesh, and A.A. Braga. "Underground gun markets." Economic Journal 117 (November, 2007).
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Other versions of this item:
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-11-12 (All new papers)
- NEP-LAW-2005-11-12 (Law & Economics)
- NEP-REG-2005-11-12 (Regulation)
- NEP-URE-2005-11-12 (Urban & Real Estate Economics)
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