Do gun buybacks "take guns off the street" and reduce violent crime?

 Here is a link to a note I wrote on gun buybacks.

Here are some excerpts.

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Introduction

This note addresses whether gun buybacks take guns off the street or reduce violent crime from several simple economic perspectives, including net present value (NPV) project evaluation, demand-supply curves, and the income effect. For the most part these perspectives suggest that it is unlikely that gun buybacks either take guns off the street or reduce violent crime. Rather, they suggest that gun buybacks are more likely than not to increase the number of street guns and increase violent crime.
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The cost of street guns is part of the initial outlays required for criminal projects involving guns. They are part of the initial outlays portion of a NPV analysis. These guns have a market value at each point in time that can be treated as an EPV if it makes sense to sell them. Both their initial cost and EPV reflect their quality, technical features, and suitability. For example, both are higher for high-end guns than low-end guns. “Clean” guns that have not been involved with serious crimes, such as shootings are particularly valuable. A street gun that becomes “dirty” may lose a large part of its market value (EPV) suddenly, early in a project.

A gun buyback provides the opportunity to convert a low EPV, e.g., from a gun going dirty, to a higher EPV. This provides a criminal with added “income”. In terms of a simple budget line – preference curve analysis, added income tends to increase consumer expenditures on all items, in this case including street guns. The income effect of a gun buyback more likely than not is to increase the number of street guns and increase violent crime.

A gun buyback program offers criminals the opportunity to sell any of their guns with a market value below a gun buyback price at a higher price than otherwise. In terms of a NPV analysis, it raises the EPV from what it would otherwise be. This increases the NPV of the criminal project. This implies that all criminal projects that have positive NPVs without a gun buyback remain a “go” and that some other criminal projects that were a ”no go” may change to a “go”. Projects that change from a “no go” to a “go” are likely to increase the number of street guns.

The increased EPV effect of a gun buyback does not reduce the demand for street guns and is likely to increases it. A corollary is that this gun buyback effect is, more likely than not to increase violent crime.

An interesting aspect of a EPV analysis of gun buybacks arises because criminals mostly obtain street guns illegally. Street guns usually have been stolen, e.g., during burglaries. There is a market for these stolen guns and the business of obtaining and selling them is a criminal project.

If a burglar finds guns, he will most likely steal them and sell them illegally. This corresponds to a short-term project similar to a merchant buying inventory for immediate sale at a markup. In this case, the gun’s EPV is realized almost immediately.

High-end stolen guns will not be proffered to a gun buyback because their street value is higher than a gun buyback price. Stolen high-end guns will end up as street guns. Stolen low-end guns may have a market value below a gun buyback price. It will pay for a criminal to submit these guns to a gun buyback. If these low-end guns would have ended up as street guns, then the gun buyback has taken them off the street and, it seems, reduced violent crime. However, things are not so simple.

Burglars are in business. More valuable loot is mostly found in the homes and businesses of people who can afford nice things. The great majority of stolen guns is likely to be high-end guns. These will be worth more as street guns because their street value exceeds a gun buyback price. While burglary may result in some low-end guns that would have become street guns being proffered to a gun buyback, it is likely that burglary will result in substantially more high-end guns becoming street guns. The latter effect of burglaries is likely to dominate the former one.

If a gun buyback raises the EPV of low-end guns, it increases the NPV of burglary. Stolen high-end guns increases the supply of street guns, which tends to reduce their market price, thereby lowering the initial outlay cost for all criminal projects requiring guns. Lowering the cost of the required initial cost of a project increases its NPV. Both these NPV effects can change a criminal project from a ‘no go” to a “go”.

A reasonable conclusion is that burglaries are likely to increase, the number of street guns (mostly high-end street guns) is likely to increase, and violent crime is likely to increase.

It appears that to the extent criminals act rationally in terms of a NPV perspective, gun buybacks are not likely to take guns off the street or reduce violent crime. More likely, gun buybacks will increase street guns and increase violent crime.