Freedomnomics

Article published Friday, April 15, 2016, at Investor's Business Daily.

Will President Obama Regulate Guns Out Of Existence?

By John R. Lott, Jr.

President Obama wants to put gun dealers out of business.

When he was a state senator in Illinois, he supported a ban on the sale of handguns and all semi-automatic guns as well as a ban on selling guns within five miles of a school or a park. While the president obviously can’t just ban them, he can use regulations to make their lives more difficult.

For some dealers it may be a slow death of a thousand regulatory cuts.

Obama never does any serious cost-benefit analysis – he just points to possible benefits while ignoring any costs. We see this in his plans for expanded background checks on private transfers or his efforts to deny guns to the elderly who get help with their finances.

Obama is also using executive actions to place even more reporting requirements on the backs of Federal Firearms License dealers. His administration is finalizing a new rule. Obama claims, “We’re going to require firearms dealers to report more lost or stolen guns on a timely basis.” But this is false. Dealers already have to report lost or stolen guns within 48 hours.

Licensed dealers have previously satisfied the reporting requirements by typically submitting a letter to the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATF), but the Obama administration wants the dealer to submit a form that will provide the government with more information, generally duplicating what the government already knows. New reports are required when the gun is recovered. Rules are also being changed for reporting guns lost in transit, though there is no evidence that this has been a problem.

Obama doesn’t give licensed dealers credit for the remarkable job that they already do. Nor does it explain why this additional information is helpful.

A new report from the BATF points out that 6,163 firearms were stolen from Federally Licensed Gun Dealers in 2015. With at least 16 million guns being sold in 2015, the rate of theft was only 0.039%. By comparison, the National Retail Federation found a 1.15% rate of theft from all retail stores in 2014 This includes shoplifting and theft or fraud by workers and vendors. This is 29.5 times higher than the rate at gun stores.

Another study, by Checkpoint Systems, used 2014-15 data to find a 1.97% theft rate at U.S. retail stores. This is 51 times higher than the rate at gun stores.

The Checkpoint Systems survey also provides data on other countries. Norway had the lowest rate of theft -- just 0.83%. This is still 21 times higher than the rate of theft at U.S. gun stores. Japan’s theft rate, the second lowest, is 1%, a 26 times higher rate.

More than three-quarters of the guns stolen from dealers are taken in burglaries. Dealers can always buy stronger safes, doors and windows, but it’s certainly difficult and expensive to make a shop burglary-proof.

For some perspective, note that there were 466,100 gun crimes in 2014. Even if all the stolen guns were used in a crime, guns stolen from federally licensed dealers would account for 1.3% of gun crimes.

The BATF also reports 8,637 “lost” guns. However, this number isn’t very useful. In the vast majority of cases, gun serial numbers were simply incorrectly recorded. Dividing that number by 16 million guns implies a theft rate of 0.054% -- still much lower than the rate for retail stores.

The National Retail Federation finds that the average retail store has a .228% rate of “administrative and paperwork errors” -- 4.2 times the rate for gun stores. Remember that since the estimated number of gun sales used in these calculations is a clear underestimate of total sales these numbers underestimate how much better gun stores perform relative to other operations.

Reducing the rate of theft or administrative error to these relatively low levels must already come at significant cost. Forms may have to be rechecked many times to eliminate paperwork errors much below a rate of hundredths of one percentage point.

These regulatory costs add up. For example, expanded background checks can add anywhere from $50 to $200 to the cost of privately transferring a gun The higher costs may price poor minorities out of owning a gun. They are the ones who are the most likely victims of violent crime and the ones who benefit the most from the ability to protect themselves.

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Some data not found at www.johnlott.org:

Updated Media Analysis of Appalachian Law School Attack

Since the first news search was done additional news stories have been added to Nexis:

There are thus now 218 unique stories, and a total of 294 stories counting duplicates (the stories in yellow were duplicates): Excel file for general overview and specific stories. Explicit mentions of defensive gun use increase from 2 to 3 now.

Journal of Legal Studies paper on spoiled ballots during the 2000 Presidential Election

Data set from USA Today, STATA 7.0 data set

"Do" File for some of the basic regressions from the paper