Center for Economic Research, Department of Economics, University of Minnesota
We study a theoretical general equilibrium environment in which the only activity of
interest is armed robbery. Agents choose whether to be citizens or robbers, and whether
to purchase handguns. Armed citizens can protect themselves from robbery but any
armed agent runs the risk of accidentally shooting himself or another agent. The
government chooses a gun tax, and the intensity of police efforts to arrest would-be
robbers and citizens who arm for self-defense. Properties of an equilibrium are
characterized and the model is calibrated and solved. In all cases unique equilibria are
obtained. We find that guns are an inefficient way of redistributing wealth, in the sense
that social costs are very large relative to actual wealth redistribution. In this model
society would be vastly better off if handguns could be eliminated. We do find, however,
that handguns substantially deter crime when crime is defined as taking another's wealth
by force. Yet handguns cause accidental deaths and resultantly in this model policymakers
confront a fundamental trade-off between property rights and gun deaths.
Boyd, J.H. and Kim, J., (2003), "A Theoretical Investigation of Handguns, Cops and Robbers", Discussion Paper No. 318, Center for Economic Research, Department of Economics, University of Minnesota.
Boyd, John H.; Kim, Jin.
A Theoretical Investigation of Handguns, Cops and Robbers.
Center for Economic Research, Department of Economics, University of Minnesota.
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