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The Social Costs of Gun Ownership


  • Phillip J. Cook
  • Jens Ludwig


This paper provides new estimates of the effect of household gun prevalence on homicide rates, and infers the marginal external cost of handgun ownership. The estimates utilize a superior proxy for gun prevalence, the percentage of suicides committed with a gun, which we validate. Using county- and state-level panels for 20 years, we estimate the elasticity of homicide with respect to gun prevalence as between +.1 and +.3. All of the effect of gun prevalence is on gun homicide rates. Under certain reasonable assumptions, the average annual marginal social cost of household gun ownership is in the range $100 to $600.

Suggested Citation

  • Phillip J. Cook & Jens Ludwig, 2004. "The Social Costs of Gun Ownership," NBER Working Papers 10736, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10736
    Note: HE

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    References listed on IDEAS

    1. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
    2. Philip J. Cook & James A. Leitzel, 2002. ""Smart" Guns: A Technological Fix For Regulating The Secondary Market," Contemporary Economic Policy, Western Economic Association International, vol. 20(1), pages 38-49, January.
    3. Deborah Azrael & Philip J. Cook & Matthew Miller, 2001. "State and Local Prevalence of Firearms Ownership: Measurement, Structure, and Trends," NBER Working Papers 8570, National Bureau of Economic Research, Inc.
    4. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2002. "An Evaluation of Instrumental Variable Strategies for Estimating the Effects of Catholic Schools," NBER Working Papers 9358, National Bureau of Economic Research, Inc.
    5. Glaeser, Edward L & Glendon, Spencer, 1998. "Who Owns Guns? Criminals, Victims, and the Culture of Violence," American Economic Review, American Economic Association, vol. 88(2), pages 458-462, May.
    6. Steven D. Levitt & Sudhir Alladi Venkatesh, 2000. "An Economic Analysis of a Drug-Selling Gang's Finances," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 755-789.
    7. Mark Duggan, 2001. "More Guns, More Crime," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 1086-1114, October.
    8. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    9. Morgan Kelly, 2000. "Inequality And Crime," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 530-539, November.
    10. Gary Solon, 1984. "Estimating Autocorrelations in Fixed-Effects Models," NBER Technical Working Papers 0032, National Bureau of Economic Research, Inc.
    11. Ludwig, Jens & Cook, Philip J, 2001. "The Benefits of Reducing Gun Violence: Evidence from Contingent-Valuation Survey Data," Journal of Risk and Uncertainty, Springer, vol. 22(3), pages 207-226, May.
    12. Philip J. Cook & John H. Laub, 2001. "After the Epidemic: Recent Trends in Youth Violence in the United States," NBER Working Papers 8571, National Bureau of Economic Research, Inc.
    13. repec:aph:ajpbhl:2003:93:7:1089-1097_4 is not listed on IDEAS
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    Cited by:

    1. Kovandzic, Tomislav & Schaffer, Mark E & Kleck, Gary, 2008. "Estimating the Causal Effect of Gun Prevalence on Homicide Rates: A Local Average Treatment Effect Approach," IZA Discussion Papers 3589, Institute for the Study of Labor (IZA).
    2. Cook, Philip J. & Ludwig, Jens, 2006. "The social costs of gun ownership," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 379-391, January.
    3. Mark Duggan & Randi Hjalmarsson & Brian A. Jacob, 2008. "The Effect of Gun Shows on Gun-Related Deaths: Evidence from California and Texas," NBER Working Papers 14371, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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