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Underground Gun Markets

Author

Listed:
  • PhilipJ. Cook
  • Jens Ludwig
  • Sudhir Venkatesh
  • AnthonyA. Braga

Abstract

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.

Suggested Citation

  • PhilipJ. Cook & Jens Ludwig & Sudhir Venkatesh & AnthonyA. Braga, 2007. "Underground Gun Markets," Economic Journal, Royal Economic Society, vol. 117(524), pages 588-618, November.
    • Handle: RePEc:ecj:econjl:v:117:y:2007:i:524:p:f588-f618
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    References listed on IDEAS

    as
    1. Roland G. Fryer & Paul S. Heaton & Steven D. Levitt & Kevin M. Murphy, 2005. "Measuring the Impact of Crack Cocaine," NBER Working Papers 11318, National Bureau of Economic Research, Inc.
    2. Gan, Li & Zhang, Qinghua, 2006. "The thick market effect on local unemployment rate fluctuations," Journal of Econometrics, Elsevier, vol. 133(1), pages 127-152, July.
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    5. Mark Duggan, 2001. "More Guns, More Crime," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 1086-1114, October.
    6. Gan, Li & Li, Qi, 2016. "Efficiency of thin and thick markets," Journal of Econometrics, Elsevier, vol. 192(1), pages 40-54.
    7. Donohue John, 2004. "Clinton and Bush's Report Cards on Crime Reduction: The Data Show Bush Policies Are Undermining Clinton Gains," The Economists' Voice, De Gruyter, vol. 1(1), pages 1-10, September.
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    Citations

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    Cited by:

    1. Philip J. Cook & Jens Ludwig & Adam Samaha, 2010. "Gun Control after "Heller": Litigating against Regulation," NBER Chapters, in: Regulation vs. Litigation: Perspectives from Economics and Law, pages 103-135, National Bureau of Economic Research, Inc.
    2. Jens Ludwig & Jeffrey R. Kling, 2007. "Is Crime Contagious?," Journal of Law and Economics, University of Chicago Press, vol. 50(3), pages 491-518.
    3. Kahane, Leo H., 2020. "State gun laws and the movement of crime guns between states," International Review of Law and Economics, Elsevier, vol. 61(C).
    4. Seiffert, Sebastian Daniel & Kukharskyy, Bohdan, 2016. "Gun Violence in the US: Correlates and Causes," VfS Annual Conference 2016 (Augsburg): Demographic Change 145946, Verein für Socialpolitik / German Economic Association.
    5. Papachristos, Andrew V. & Wildeman, Christopher & Roberto, Elizabeth, 2015. "Tragic, but not random: The social contagion of nonfatal gunshot injuries," Social Science & Medicine, Elsevier, vol. 125(C), pages 139-150.
    6. David Fortunato, 2015. "Can Easing Concealed Carry Deter Crime?," Social Science Quarterly, Southwestern Social Science Association, vol. 96(4), pages 1071-1085, December.
    7. Wm. Alan Bartley & Geoffrey Fain Williams, 2022. "The role of gun supply in 1980s and 1990s youth violence," Contemporary Economic Policy, Western Economic Association International, vol. 40(2), pages 323-348, April.
    8. Rigby, Dan & Burton, Michael & Balcombe, Kelvin & Bateman, Ian & Mulatu, Abay, 2015. "Contract cheating & the market in essays," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 23-37.
    9. David Skarbek, 2024. "The political economy of criminal governance," Public Choice, Springer, vol. 200(1), pages 1-24, July.
    10. Evans, William N. & Kotowski, Maciej H., 2024. "The demand for protection and the persistently high rates of gun violence among young black males," Journal of Public Economics, Elsevier, vol. 234(C).
    11. repec:pri:indrel:dsp010p096690c is not listed on IDEAS
    12. Ehrlich, Isaac & Saito, Tetsuya, 2010. "Taxing guns vs. taxing crime: An application of the "market for offenses model"," Journal of Policy Modeling, Elsevier, vol. 32(5), pages 670-689, September.
    13. Leo H. Kahane, 2013. "Understanding The Interstate Export Of Crime Guns: A Gravity Model Approach," Contemporary Economic Policy, Western Economic Association International, vol. 31(3), pages 618-634, July.
    14. Blais, Etienne & Décary-Hétu, David & Leclerc, Benoit, 2024. "1200 paths and counting: A script analysis of firearms trafficking in the Province of Quebec, Canada," Journal of Criminal Justice, Elsevier, vol. 95(C).
    15. Brendan O'Flaherty & Rajiv Sethi, 2010. "Peaceable Kingdoms and War Zones: Preemption, Ballistics and Murder in Newark," NBER Chapters, in: The Economics of Crime: Lessons For and From Latin America, pages 305-353, National Bureau of Economic Research, Inc.
    16. Philip J. Cook & John MacDonald, 2010. "Public Safety through Private Action: An economic assessment of BIDs, locks, and citizen cooperation," NBER Working Papers 15877, National Bureau of Economic Research, Inc.
    17. Iain W. Long, 2017. "The Storm Before the Calm? Adverse Effects of Tackling Organized Crime," Manchester School, University of Manchester, vol. 85(5), pages 541-576, September.
    18. Ciomek, Alexandra M. & Braga, Anthony A. & Papachristos, Andrew V., 2020. "The influence of firearms trafficking on gunshot injuries in a co-offending network," Social Science & Medicine, Elsevier, vol. 259(C).
    19. Jeffrey R. Kling & Jens Ludwig, 2006. "Is Crime Contagious?," Working Papers 889, Princeton University, Department of Economics, Industrial Relations Section..
    20. Bac, Mehmet, 2010. "The interaction between potential criminals' and victims' demands for guns," Journal of Public Economics, Elsevier, vol. 94(5-6), pages 337-343, June.
    21. Long, Iain W., 2013. "Recruitment to Organised Crime," Cardiff Economics Working Papers E2013/10, Cardiff University, Cardiff Business School, Economics Section.
    22. Evans, William N. & Garthwaite, Craig & Moore, Timothy J., 2022. "Guns and violence: The enduring impact of crack cocaine markets on young black males," Journal of Public Economics, Elsevier, vol. 206(C).
    23. T. Randolph Beard & Richard Alan Seals Jr. & Michael L. Stern, 2014. "Security and Government Credibility," Auburn Economics Working Paper Series auwp2014-07, Department of Economics, Auburn University.
    24. Philip J. Cook & Jens Ludwig, 2006. "Aiming for evidence-based gun policy," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(3), pages 691-735.

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    More about this item

    JEL classification:

    • 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

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