J Brauer | © Stone Garden Economics
In recent weeks a curious news item made the world headlines: “Gun sales surge after Obama’s election.” The story has been all over the print and electronic media, even outside the United States. The media cite Obama’s antigun campaign speeches and fears associated with the economic recession as the primary reasons for the increase in sales.
A problem with the headline is that absolutely nobody – no private agency, no gun or antigun lobby, no independent researcher, and no state or federal public agency – actually collects gun sales data. I know because I have spent the past couple of years studying the industry.
Here is what we do know. Following federal legislation in the 1990s, the Federal Bureau of Investigation (FBI) instituted a National Instant Criminal Background Check System, commonly referred to as the NICS background check. Since November 1998, holders of Federal Firearms Licenses (FFL) wishing to sell (i.e., transfer) guns must check certain details of the prospective buyers (i.e., recipients) with the FBI. The check will either approve or deny the transfer. Reasons for denial include prior criminal conviction (punishable by more than one year), dishonorable military discharge, a restraining order for domestic violence, and other categories.
The NICS data are reported monthly, and it is correct that relative to the same months in the respective prior years there have been uncommonly large spikes in background checks in November 2008 (+ 42 percent), December 2008 (+ 24 percent), and January 2009 (+ 29 percent). The total number of checks for the three most recent months comes to almost 4.3 million versus about 3 million in the prior period.
Based on month-by-month data for 2007 and 2008, we know that only about 70 percent of the background checks actually are for prospective gun acquisition. The remaining 30 percent are for other purposes, such as recurring gun license checks. In addition, not everyone who passes the check will necessarily go on to purchase a weapon. Even if they do, they may purchase multiple guns, so that the actual number of guns acquired is unknown. Moreover, gun sales made at gun shows or garage sales (depending on state law, that’s permissible), i.e., private sales rather than dealer sales, need no background check at all.
While there is probably some truth to the gun sales story, we do not have the actual gun sale numbers. We can only assume that if past NICS background checks translate into a certain number of gun sales then a higher current number of checks will translate into higher sales. This is probably a fair assumption, although dealer sales are not the same thing as manufacturing jobs. In fact, we have data on U.S. domestic nonmilitary handgun and long gun production (i.e., revolvers, pistols, shotguns, and rifles for the civilian and law enforcement markets) for 1989 to 2007, as well as recently obtained firearms import and export data for 1989-2007. Although the quality and reliability of the data is far from perfect, the overall trend is quite clear: adjusted for population growth, U.S.-based nonmilitary firearms production has shrunk by one-third from 17.7 guns per 1,000 people in the population in 1989 to 12.3 guns in 2007. At the same time, net imports of these guns rose from 3.5 guns per 1,000 people in 1989 to 8.6 in 2007. That is more than double, by far.
Add up the numbers and one gets a rough estimate of gun availability in the United States: about 21.2 guns per 1,000 people in 1989 and about 20.6 in 2007, with an average of 19.0 for the entire 19-year period. The fraction of U.S.-based manufacturers supplying these guns has dropped from 83 percent to just under 60 percent. Put differently, it won’t be long before about one-half of all nonmilitary guns available for purchase in the United States will be supplied from overseas. In fact, if present trends hold, we will be close to the turning point at the time of the 2012 presidential election.
If the pro-gun lobby appears somewhat jubilant over the recent news reports of rising gun sales, the domestic gun manufacturing industry nonetheless seems in trouble. It is no wonder that a number of well-known manufacturers have accessory sidelines ranging from shooting galleries to clothing (yes, clothing!), that the industry in 2007 was swept by a wave of mergers and acquisitions, and that more and more gun manufacturing is outsourced to countries such as Mexico, Italy, Turkey, and Russia.
J Brauer is Professor of Economics, James M. Hull College of Business, Augusta State University, Augusta, Georgia, USA.
