The Elasticity of Firearms and Their Supply and Demand
Amy Jewett Rawlins
BUSN 6120, Managerial Economics
Spring 1, 2013
13 January 2013
CERTIFICATE OF AUTHORSHIP: I certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
Amy Kathleen Jewett Rawlins 15 January 2013
The three chapters that we studied this week highlighted many important principles in the study of Economics. One of those concepts is the concept of elasticity of a good or particularly concerning this paper, the Elasticity of Firearms for Americans. Many factors influence the value of guns to the U.S. citizen. The top two are the Bill of Rights and personal safety, but another of the other idea discussed that would affect gun sales revenue is the possibility of a budding Black Market if there are stricter firearm laws implemented.
Due to increased violence, anti-gun activists, pricing and sales tax, an uninformed economist might view the demand for guns to be completely elastic. My opinion is that the civilian purchase and ownership of guns by United States citizens is moderately inelastic due to the Bill of Rights and for personal protection of one’s self, family and property. Though ownership of firearms is regulated by the United States Government with waiting periods and background checks, however private citizens – like those at gun shows and on Craig’s List, can sell their hand guns and rifles without these rules limiting who can buy and who can sell and without waiting periods. Many countries around the world have outlawed personal ownership and purchase of firearms, more specifically hand guns and automatic weapons, but these are usually considered one category in many countries and gun ownership is strictly controlled if not altogether prohibited. According to Heather Rodgers who is the author of Gun Control: International Comparison she lists Japan, Australia and the United Kingdom as leaders in the global community that are fighting for the control of guns and America and Germany as prime examples of what she considers gun ownership gone bad(Rodgers, 2012). There are multiple reasons that Americans choose to take advantage of their Bill of Rights and own a weapon: For some it is for protection, for others it is to participate in sporting events and for some it is even for work. No matter the reason or no matter the income, firearms are an inelastic good and one that Americans will not forego, even under penalty of law. John F. McDonald (1995) an economics professor with the University of Illinois Chicago created a study in 1995 called An Economic Analysis of Guns, Crime and Gun Control and even as far back as 17 years ago, he could see the how the drive of gun ownership was very important to the citizens of the United States and despite their income, the supply level and other factors, the demand for firearms would be high, as well as the cost but citizens would be willing to pay the price that was demanded. The premise of his paper is basically stating that the level of crime is what drives the demand market for guns. The United States of American will always have one of the strongest firearms advocates that any country can ever have - the Bill of Rights. Our founding fathers came from oppressed lands. They weren’t allowed even basic freedoms so when America won her independence, these new citizens remembered the many acts of their former government(s) and developed a Constitution with a Bill of Rights that listed what they believed should be the basic freedoms of every “man” that maybe overlooked. The second Amendment guarantees U.S. Citizens, “the right of the People to keep and bear arms”...