Underground gun markets

Author: Cook, P. J. / Ludwig, J. / Venkatesh, S. / Braga, A. A.
Publication: Economic Journal
Topics: Crime Local Supply Surveillance/Data Collection
Keywords: Chicago Economics Gun sales
Bibliographic information +

The economics of illegal gun sales in Chicago are studied via interviews, surveys, and surveillance data. High transaction costs, such as illegal guns being priced higher than legal guns, increased difficulty identifying a prospective seller/buyer, little information about product quality, and safety risk are all obstacles to completing a gun sale on the black market. These costs may be the result of this market not only being illegal but having few buyers and sellers relative to other illegal markets. The illegality makes it difficult for potential market participants to obtain good information about the market, further raising their costs.