...the potential consequences of MSSA misuse clearly outweigh any benefit to society in permitting their ownership.Any doubt as to how to measure the costs of allowing MSSA ownership was cruelly put to rest on Friday 15 March. Those costs clearly outweigh the benefits of farmers being able to rapidly exterminate rabbits without having to spend time re-loading their weapon.
However, this isn't a post about MSSAs. It is about another aspect of gun control - registration. New Zealand has a system where gun owners are registered, but individual firearms are not. In the U.S., individual firearms are registered, but for the most part gun owners are not (there are some differences in regulations between different states). What impact does the difference in registration systems make to the number of people with at least one gun, and the number of guns per gun owner?
Consider a system of gun registration. Every gun is registered. The cost of gun registration is included in the price of each gun that is sold (possibly the cost of registration is an explicit part of the price, or perhaps the costs of the registration system are borne by manufacturers or sellers, in which case they charge a higher price to compensate). [*]
We can think of this registration system as the base case, illustrated in the diagram below with the black lines. In this model, the gun consumer is choosing between buying guns (X, measured on the x-axis) or all other goods (AOG, measured on the y-axis). The straight black line is their budget constraint, which represents the most the consumer can afford to buy with their income, when there is a single price-per-unit for guns (including the cost of registration). The consumer purchases the bundle of goods E, which is on the highest indifference curve they can get to (I0). This bundle includes X0 guns, and A0 of All Other Goods.
Now consider what happens if guns are not registered, but owners are. This is an example of two-part pricing. Two-part pricing occurs when the price is split into two parts: (1) an up-front fee for the right to purchase; and (2) a price per unit. Here, the up-front fee is the cost of registering for a firearms licence. The price per unit is the cost of the gun. However, the cost of the gun is lower than it would be when guns are registered, because of the saving on the cost of gun registration.
Because of the up-front fee (firearms licence), the budget constraint starts at a lower point on the y-axis, since paying for the firearms licence is like giving up income for the consumer. Then, because there is a lower per-unit price, the budget constraint for licensing gun owners (the red budget constraint) is flatter than for licensing guns. Let's assume it passes through the point E (so the consumer could still purchase that bundle of goods if they wanted to). There is one other point that we need to recognise - if the consumer buys no guns, then they do not need to pay for a firearms licence. So Bundle C is also an option for the consumer.
When gun owners are licensed instead of guns, this consumer can now reach a higher indifference curve, by buying the bundle of goods D (their new best affordable choice). This bundle includes more guns (X1), and less of All Other Goods (A1). So, we would expect gun owners to own more guns if gun owners are registered, but guns are not.
Is there evidence to support this? Let's compare New Zealand and the U.S. In New Zealand, there are 245,000 firearms licences, and 1.2-1.5 million firearms (see the statistics at the bottom of this article). That accounts to a rate of about 5.5 firearms for each person with a licence. In the U.S., about 25% of adults own at least one firearm (see the statistics in this article), or about 60 million adults, and there are about 300 million firearms, or about five firearms for each gun owner. So, that provides some slight support for the model.
However, notice that the rate of gun ownership among New Zealand adults (245,000 out of roughly 3.5 million adults is roughly 7 percent) is substantially less than in the U.S. (25 percent). What accounts for this?
Consider consumers with low demand for gun ownership, as shown in the diagram below by the blue indifference curves (the red indifference curves show the preferences for high-demand consumers). With gun registration, the low demand consumer buys Bundle G, which includes X1 guns, and A1 of All Other Goods. When guns are registered, even many low-demand consumers prefer to own a gun.
Is there evidence to support this? Let's compare New Zealand and the U.S. In New Zealand, there are 245,000 firearms licences, and 1.2-1.5 million firearms (see the statistics at the bottom of this article). That accounts to a rate of about 5.5 firearms for each person with a licence. In the U.S., about 25% of adults own at least one firearm (see the statistics in this article), or about 60 million adults, and there are about 300 million firearms, or about five firearms for each gun owner. So, that provides some slight support for the model.
However, notice that the rate of gun ownership among New Zealand adults (245,000 out of roughly 3.5 million adults is roughly 7 percent) is substantially less than in the U.S. (25 percent). What accounts for this?
Consider consumers with low demand for gun ownership, as shown in the diagram below by the blue indifference curves (the red indifference curves show the preferences for high-demand consumers). With gun registration, the low demand consumer buys Bundle G, which includes X1 guns, and A1 of All Other Goods. When guns are registered, even many low-demand consumers prefer to own a gun.
However, if gun owners are registered instead of guns, the low demand consumer can no longer afford bundle G (it is outside the new budget constraint). The highest indifference curve they can get to is I0, where they buy Bundle C. This bundle includes no guns. These low demand consumers find themselves better off by not buying any guns at all, because then they don't have to pay for a firearms licence. [**]
So to summarise, licensing gun owners rather than guns leads many people not to want to own any guns at all. However, those who do own guns would tend to own more of them. And comparing U.S. and New Zealand data on gun ownership and the number of guns per gun owner seems to support this.
At this point, which system you prefer comes down to whether you want lots of people to have guns, or you want fewer people to have guns but each one of those gun owners to own many guns. Of course, registering both guns and gun owners would be preferable to either registration system in isolation, if your goal is simply to reduce the total number of available guns.
*****
[*] Another alternative is that the gun registration system is funded by taxpayers. However, there will still be some additional time and effort required to purchase a gun that is registered, so the cost will be higher than with no registration system.
[**] The story for high-demand consumers is similar to that in the first diagram. Here, they move from consuming bundle J (if guns are registered but owners are not) to bundle K (if guns are not registered but owners are). So, high-demand consumers own more guns in the case where owners are registered but guns are not.
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