Underground Gun Markets

43 Pages Posted: 29 Jan 2006 Last revised: 29 Jul 2010

See all articles by Philip J. Cook

Philip J. Cook

Duke University - Sanford School of Public Policy; Duke University, Dept. of Economics; National Bureau of Economic Research (NBER)

Jens Ludwig

Georgetown University - Public Policy Institute (GPPI); National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Sudhir Alladi Venkatesh

Columbia University - Department of Sociology

Anthony A. Braga

Harvard University - Harvard Kennedy School (HKS); Rutgers, The State University of New Jersey - School of Criminal Justice

Date Written: November 2005

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 %u201Cthin%u201D -- 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%u2019s economic interests cause gang leaders to limit supply primarily to gang members, and even then transactions are usually loans or rentals with strings attached.

Suggested Citation

Cook, Philip J. and Ludwig, Jens and Venkatesh, Sudhir Alladi and Braga, Anthony A., Underground Gun Markets (November 2005). NBER Working Paper No. w11737. Available at SSRN: https://ssrn.com/abstract=842472

Philip J. Cook (Contact Author)

Duke University - Sanford School of Public Policy ( email )

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Duke University, Dept. of Economics

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National Bureau of Economic Research (NBER)

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Jens Ludwig

Georgetown University - Public Policy Institute (GPPI) ( email )

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National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

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Sudhir Alladi Venkatesh

Columbia University - Department of Sociology ( email )

3009 Broadway
New York, NY 10027
United States

Anthony A. Braga

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-496-9835 (Phone)

Rutgers, The State University of New Jersey - School of Criminal Justice ( email )

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Newark, NJ 07102-309
United States

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