The Social Costs of Gun Ownership: Spurious Regression and Unfounded Public Policy Advocacy

MAGKS Joint Discussion Paper No. 32-2013

35 Pages Posted: 11 Jul 2013  

Christian Westphal

University of Marburg - School of Business & Economics; University of Marburg

Date Written: July 08, 2013

Abstract

In 2006, a study, published in the Journal of Public Economics, employing a panel regression of 200 U.S. counties across 20 years, found a significant elasticity of homicides with respect to firearms ownership. Based on this finding the authors made the public policy recommendation of taxing gun ownership. However that study fell prey to the ratio fallacy, a trap known since 1896. All the "explanatory power" (goodness-of-fit-wise and significance-wise) of the original analysis was due to regional and inter-temporal differences and population being explained by itself. When the ratio fallacy is accounted for, all authors’ results can no longer be found. This is illustrated in this paper using a balanced panel from the data for 1980 to 2004. My findings are robust to (i) alternative specifications not subject to the ratio problem, (ii) using only data from 1980 to 1999 as in the original paper, (iii) using an unbalanced panel for 1980 to either 1999 or 2004, (iv) applying weighting as done by the original authors and (v) using data aggregated at the state level.

Keywords: gun ownership, social costs, ratio fallacy, spurious regression

JEL Classification: C51, H21, I18, K42

Suggested Citation

Westphal, Christian, The Social Costs of Gun Ownership: Spurious Regression and Unfounded Public Policy Advocacy (July 08, 2013). MAGKS Joint Discussion Paper No. 32-2013. Available at SSRN: https://ssrn.com/abstract=2292226 or http://dx.doi.org/10.2139/ssrn.2292226

Christian Westphal (Contact Author)

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, 35032
Germany

University of Marburg ( email )

Universitätsstrasse 24
D-35032 Marburg, D-35032
Germany

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