Friday, December 21, 2012

Should we subsidize guns? (please note the question mark at the end and the interrogative at the beginning of the sentence)

Stephen Williamson suggests we might want to tax guns because of the negative externalities involved. A commenter of mine agrees.

But this is all pretty presumptuous about the effect of guns on third parties. It's possible we should subsidize guns too. I'm not a gun owner, but I do know and trust my neighbors. They're pretty good guys, and they've already looked out for Kate and me on minor things. I have no idea if they are gun owners, but if I found out they were I'd feel even safer.

This is pretty straightforward stuff. Of course guns can cause harm to third parties, but they can also benefit third parties.

What wins out? Should we be subsidizing gun purchases? If we're going to invoke Pigou on this one we ought to consider this possibility too.

I honestly don't know what wins out. It's not my sense that the evidence is clear either way. My guess is that there is a fairly large gross negative externality as well as a fairly large gross positive externality, and I'm not sure where the net effect comes down.

15 comments:

  1. If anyone knows a good review article on this issue I'd love to see it. I searched on JEP and JEL and didn't come up with anything on the search function (which is not to say it's not there).

    I ask for a survey because any given study is going to have its flaws. What I'm really interested is the broader strategies to get at the knotty endogeneities associated with guns.

    It's exactly like fiscal policy: you're going to buy a gun if you feel less safe because of violence around you. People who aren't violent or who don't have a safe-firearm culture are probably more likely to push through stricter gun control legislation. I'm not sure how gun studies deal with this, and it's critically important in assessing these questions.

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  2. Afaik, based on the poll results, more citizens of USA dislike the guns than vice versa, so, if we are considering opinions to have the same value, then guns should be taxed? My understanding of Pigou's theories sucks though.

    Most countries that allow the possession of firearms do not try to tax or subsidize away externalities but rather use central planning: who can and can't own a gun is decided by procedures other than a market process. I find it *amusing* that ideas like not giving weapons into the hands of nutjobs, criminals and sociopaths are an impractical radicalism in your nation.

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    1. I don't think that's considered impractical radicalism here. That's sort of what we do, right?

      I'm not advocating taxes or subsidies and I don't think there's a snowball's chance in hell it'll happen. This is just economist chatter.

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    2. Yeah, right. The most anti-gun activists could hope to push through will be a temporary assault weapons ban. I bet that even that is suspect. A few weeks latter the massacre won't even be an important media event and then it will be back where it all started...

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    3. But I mean that's how we approach gun control: limits on criminals, background checks, etc. They've been talking about mental health restrictions since Virginia Tech (not sure where that has gone), although that's obviously tricky. We don't tax guns in the U.S., we ban certain things for certain people - precisely what you would like (maybe we do it less stringently than you would like, but that's a different point).

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    4. Some states do that, some don't. I remember that NY had some strict laws six years ago, but for buying handguns in the South you pretty much needed only a wallet with cash. So, the inconvenience is, at most... riding an interstate bus? Not very restrictive.
      And the federal laws that limit the ownership of guns are flat out politically impossible now.

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  3. You could do both, taxing ownership and rebating the fee when actively used to stop a crime or apprehend a criminal. No points for intra criminal violence or for possession in abstract.

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    1. That's a neat idea, although I could see some huge moral hazard problems with that one!

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    2. I kind of love this idea a lot, actually. Gun tax (that possibly tapers off at low incomes so as to not put poor people at a disadvantage), plus a reward/rebate for using the gun to stop crime. I think it internalizes the problem in all the right ways.

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    3. But Dave, when you hand everyone a rebate for using their hammer, everything starts looking like a nail!

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  4. Came across this summary of a paper that came out of Harvard a while back:

    http://theacru.org/acru/harvard_study_gun_control_is_counterproductive/

    I haven't read the full paper, so I don't know if any sophisticated techniques were used. My impression was that they just looked at some basic correlations.

    Anyways, they came out with the finding that murder rates and gun ownership are negatively correlated when you look across western countries. Note that it's not *gun murder* rates where the negative correlation was (for example, there were cases where larger gun ownership is observed with greater *gun* murders). But they tended to find that all other types of murder were substantially lower - strangling, stabbing, and beating.

    This sole case suggests that the positive externalities might outweigh the negative - at least "death externalities".

    I do remember reading that some Asian countries like Japan and South Korea have had a lot of success with tight gun control, but I really don't know the stats. And I'm a bit more hesitant about speculating across cultures as they become more and more different - there's too many unmeasurable control variables.

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  5. What negative externalities are you thinking of? It seems to me the "I shoot somebody with my gun" externality is pretty thoroughly internalized by prison sentences.

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    1. This is a really good point, maybe the case is more heavily weighted towards subsidies than I thought...

      ...not that I'll be brazenly proposing that any time soon myself!

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    2. Lanza's mother owned the guns, which presented a cost to students she had not thus internalized.

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  6. To what extent is the potential positive externality generated by your neighbours a function of the fact that any lunatic in the U.S. can get a gun?

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