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The Social Costs of Gun Ownership: Spurious Regression and Unfounded Public Policy Advocacy

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  • Christian Westphal

    () (University of Marburg)

Abstract

In 2006, a study, published in the Journal of Public Economics, employing a panel regression of 200 U.S. counties across 20 years, found a significant elasticity of homicides with respect to firearms ownership. Based on this finding the authors made the public policy recommendation of taxing gun ownership. However that study fell prey to the ratio fallacy, a trap known since 1896. All the “explanatory power” (goodness-of-fit-wise and significance-wise) of the original analysis was due to regional and intertemporal differences and population being explained by itself. When the ratio fallacy is accounted for, all authors’ results can no longer be found. This is illustrated in this paper using a balanced panel from the data for 1980 to 2004. My findings are robust to (i) alternative specifications not subject to the ratio problem, (ii) using only data from 1980 to 1999 as in the original paper, (iii) using an unbalanced panel for 1980 to either 1999 or 2004, (iv) applying weighting as done by the original authors and (v) using data aggregated at the state level.

Suggested Citation

  • Christian Westphal, 2013. "The Social Costs of Gun Ownership: Spurious Regression and Unfounded Public Policy Advocacy," MAGKS Papers on Economics 201332, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201332
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    File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/32-2013_westphal.pdf
    File Function: First 201332
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    More about this item

    Keywords

    Gun Ownership; Social Costs; Ratio Fallacy; Spurious Regression;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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