Underground Gun Markets

Philip J Cook, Jens Ludwig, Sudhir Venkatesh and Anthony A. Braga

No 11737, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This 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 "thin" -- 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's economic interests cause gang leaders to limit supply primarily to gang members, and even then transactions are usually loans or rentals with strings attached.

JEL-codes: K42 L1 (search for similar items in EconPapers)
Date: 2005-11
New Economics Papers: this item is included in nep-law, nep-reg and nep-ure
Note: CH EH LE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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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Journal Article: Underground Gun Markets (2007)
Working Paper: Underground Gun Markets (2005)
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