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Businessweek Archives

New Ammo In The Gun Debate

Economic Trends

New Ammo in the Gun Debate

Yes, ownership does foster crime

The U.S. has the highest gun ownership rate in the world and the highest murder rate. Although those facts are enough to convince many observers that guns breed violence, firearms owners and manufacturers have long argued that the opposite is true--that lawful possession of a gun tends to deter crime.

That argument has sparked a hot debate among economists. Most concur with the views of gun critics, contending that greater gun availability means that more weapons fall into the hands of criminals. But others find that increased gun ownership results in less criminal activity. Indeed, More Guns, Less Crime is the title of a controversial book published two years ago by then-University of Chicago economist John R. Lott Jr. (now at Yale University). Lott found that violent crimes dropped significantly in a number of states after laws were passed allowing citizens to carry concealed weapons.

The latest entry in the debate is a forthcoming Journal of Political Economy study pointedly titled "More Guns, More Crime." Authored by another University of Chicago economist, Mark Duggan, the study addresses a serious problem with past studies of the issue: Because guns aren't registered in most areas of the country, researchers have had to rely on highly imprecise indicators to estimate levels of gun ownership in different geographical areas.

To solve this problem, the study relies on a unique data source. It uses detailed state and county data on the circulation of one of the nation's largest gun magazines from 1980 to 1998. These circulation data are an excellent proxy for gun ownership levels and shifts, Duggan notes, because they are highly correlated with a number of ownership-related trends--from local gun-accident death rates and the annual number of local gun shows per capita, to National Rifle Assn. membership levels and household surveys relating to gun possession.

Duggan finds a strong positive relationship between changes in gun ownership in an area and future changes in gun homicides. In contrast, changes in ownership rates had no effect on homicides where other weapons are used (which account for a third of all murders)--a finding that underscores the substantial impact of ownership on gun murders.

Duggan also reports two results that undermine the notion that allowing citizens to carry concealed arms reduces crime. He finds no evidence that gun ownership went up in states passing such laws. And, in such states, counties with high levels of legal gun ownership did not experience larger declines in crime than counties with low ownership levels.

From 1993 to 1998, a period when most crime rates were falling, the share of U.S. households with at least one gun dropped from 42.4% to 34.9%. At the same time, the number of gun homicides fell 36%, exactly twice as much as homicides committed with other weapons.

Duggan's analysis attributes a third of the greater decline in gun murders in this five-year period to the decrease in gun ownership, with the biggest impact in states with the biggest ownership drops. "The idea that increases in gun ownership reduce crime," he says, "just doesn't square with the facts."By Gene KoretzReturn to top

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Redefining Core Inflation

New measures cause more worry

What, me worry about inflation? In both Europe and the U.S., consumer inflation has picked up steam this year, running at least a percentage point higher on a year-over-year basis than 1999. The markets, however, prefer to focus on so-called "core" inflation, which excludes volatile food and energy prices and remains relatively low. But economists at Lehman Brothers argue that this measure may not be the best definition of core inflation, which is supposed to reveal the underlying trend. Rather than fluctuating randomly, for example, food prices have generally moved in line with real economic activity in recent years.

As it happens, statisticians over the years have proposed alternate definitions of core inflation that they claim are better at reflecting basic inflation trends. In general, such measures are constructed by placing less weight on those items that are farthest from the average or that exhibit the greatest price variability.

Using several of these alternate measures of core inflation, the Lehman economists find that they all are still running lower than overall consumer inflation in both Europe and the U.S. Unlike the traditional core definition, however, these measures have also accelerated sharply and are tracking much closer to consumer prices in general.

The implication is that the pickup in consumer inflation may be more durable than many expect. Indeed, Lehman notes that households' inflation expectations in Europe are also up sharply this year.By Gene KoretzReturn to top

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