The Market for New Handguns: An Empirical Investigation

Abstract

Annual data from 1961–94 are used to estimate a supply and demand model for the new handgun market. The influence of price, income, expenditures on police protection, the violent crime rate, the Gun Control Act of 1968, and the Brady Handgun Violence Prevention Act of 1993 on the number of new handguns per capita is explored. The demand for handguns is elastic; a 1 percent increase in the price of handguns lowers the quantity demanded by 2–3 percent. Further, the demand for handguns is sensitive to the price of other firearms, such as shotguns, to per capita expenditures on law enforcement, and to the lagged violent crime rate. The demand for new handguns increased in the period preceding implementation of the Gun Control Act and the Brady Act. Finally, implementation of the Gun Control Act of 1968 does not appear to have significantly impacted the supply of new handguns.