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The Way of the Gun: Estimating Firearms Trafficking across the US–Mexico
Border
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1. Introduction
The total volume of firearms traffic from USA to Mexico has both intrigued and
frustrated those seeking to quantify and lower it. Previous efforts to address the issue
have usually focused only on the quantity of arms confiscated at the border, begging the
question of what fraction of the total they represent. We tackle the problem differently:
we create a unique GIS-generated county-level panel dataset (1993–1999 and 2010–
2012) of Federal Firearms Licenses to sell small arms (FFLs). We then model total
realized demand for firearms, in which the number of licensed gun retailers in each
county represents quantity, and the distance by road from each US county to the nearest
point on the US–Mexico border represents a price signal (in terms of fuel and time) to
potential traffickers. We use a time-series negative binomial model and control for
determinants of domestic demand (e.g. income, political leaning, population density and
spatial autocorrelation). Employing a post-estimation population attributable fraction
ß The Author (2014). Published by Oxford University Press. All rights reserved. For Permissions, please email: [email protected]
2 of 31 . McDougal et al.
(PAF) estimator, we are then able to estimate a total demand for trafficked weapons,
both in terms of firearms and dollar sales for the firearms industry.
The remainder of the article is structured as follows: Section 2 provides a background
on the issues surrounding firearms trafficking, including US legislation, the rise of
violence in Mexico, and existing studies of the issue; Section 3 lays out our empirical
strategy and basic methodology; Section 4 describes our results, including total volume
estimates; Section 5 concludes with a discussion of methodological considerations.
2. Background
As US legislators ponder the problem of gun violence associated with horrific shootings
that have occurred throughout the country in recent years, such violence has taken an
even greater toll in Mexico. A recent study found that there were approximately 120,000
homicides in Mexico from 2007 through 2012, and an estimated 60,000 of these were
1 It should be noted, however, that the anticipation of the ban taking effect caused a run on military-style
weapons, causing prices and production to rise in the short-run (Koper and Roth, 2002).
Firearms trafficking across the US–Mexico border . 3 of 31
14000000 300000
12000000
250000
8000000
150000
6000000
100000
4000000
50000
2000000
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Year
Type 1 FFLs Manufactures Federal Assault
Imports Exports
Figure 1. Number of firearms manufactured, imported, exported and available for sale
(primary vertical axis) and federal retail licenses (secondary vertical axis), 1986–2012. Source:
ATF (2013); graph by the authors.
Act in 1993 heightened uncertainty among gun owners that they would be able to
purchase the types or quantities of firearms they wanted in the future, thereby
stimulating demand and causing the spike in purchases we observed in that year.
The US domestic firearms market is also large by dollar volume of sales. Figure 2
illustrates an imputed dollar volume of the market from 1983 to 2012, based on excise
taxes collected by the Internal Revenue Service (IRS) and the Bureau of Alcohol,
Tobacco, Firearms, and Explosives (ATF). Before the AWB started acting, the annual
volume spiked to over US$ 2.3 billion in 1993. We project, based on sales volume, that
revenues were over US$ 5.3 billion in 2012, the last year of the data reported in Figure 1.
The large number of guns available in USA is facilitated by a widespread availability
of retail firearm licenses, permissive import regulations, and largely unregulated, owner-
to-owner ‘kitchen-table’ sales. This makes many different types of deadly firearms,
ammunition and explosives legally available for purchase in USA. Moreover, the fact
that only 5% of the roughly 54,000 registered gun dealers2 in USA are inspected
annually (Marks, 2006), which suggests that there are few checks against illicit practices
such as sales to ‘straw purchasers’, who buy guns for the purpose of illegal resale or
trafficking (Violence Policy Center, 2009). Part of the difficulty in achieving more
2 Estimates for the total number of gun dealers in USA vary, but by all accounts have declined dramatically
over the last decade—from approximately 245,000 to 54,000 dealers—thanks to tougher enforcement by
ATF and tighter gun regulations (e.g. the Brady Handgun Violence Protection Act of 1993) (Marks, 2006;
Vernick et al., 2006).
4 of 31 . McDougal et al.
$70,00,000
Total Sales (US$1,000)
$60,00,000
Total Excise (Current US$1,000)
$50,00,000
US$ (Thousands)
$40,00,000
$30,00,000
$20,00,000
$10,00,000
2001*
2003*
2005*
2007*
2009*
2011*
1987
1989
1991
1995
1983
1985
1993
1997
1999
Year
Figure 2. Domestic revenue and tax excise volumes of the US firearms industry in thousands
of US dollars, 1983–2012. Source: ATF (2013) and the authors; graph by the authors. Excise
tax rates are 10% on pistols and revolvers, 11% on other firearms and ammunition.
Disaggregated volumes of excise volumes for different types of sales are based on 1996 relative
percentages, as ATF stopped collecting those statistics that year. Until FY 1990, the Internal
Revenue Service collected excise taxes. ATF assumed the collection in FY 1991. Dollar volume
is imputed for years 2001–2012 based on volume sold, past dollar volumes reported and
inflation rates.
effective firearm regulations is that powerful US gun lobbies have hamstrung efforts to
enforce existing laws or otherwise regulate access to deadly, high-powered weapons in
USA (Violence Policy Center, 2010, 2011).
Mexico, in contrast, maintains significant restrictions on firearms. While the Mexican
Constitution guarantees right of Mexicans to carry arms, Mexico’s Federal Firearms
and Explosives Law and other supporting legislation strictly regulate the possession and
sales of firearms, ammunition and explosives.3 Current restrictions on firearms in
Mexico date back to the period of civil unrest in the late-1960s, which led to a tightening
of regulations, which included the closure of retail firearm dealers and federal
requirements for the registration of all firearms. While law enforcement and military
personnel are permitted to use firearms by Article 160 of the country’s federal criminal
code, the Mexican army (SEDENA) oversees the sale of all firearms to private
individuals through the Federal Arms Registry. Person-to-person firearm sales are
3 Article 10 of the Mexican Constitution, amended in 1971, states that Mexicans have a ‘‘right to possess
arms in their homes for their security and legitimate defense with the exception of those prohibited by
federal law and those reserved for the exclusive use of the Army, Navy, Air Force, and National Guard.
Federal law shall determine the cases, conditions and place in which the inhabitants may be authorized to
bear arms.’’
Firearms trafficking across the US–Mexico border . 5 of 31
35,000
Mexico 32,332
30,000
U.S. 29,824
25,000
Firearms Seizures
20,000
15,000
10,500
10,000
9,553
4,976
5,000
2,900
-
2005 2006 2007 2008 2009
Year
prohibited by Article 164 of the criminal code. There are also strict penalties under
Article 162 of the federal criminal code for ordinary citizens who possess or carry
firearms without authorization.4 There are also restrictions on the caliber of firearms
that ordinary citizens may possess, which is limited to 0.380 or less (0.357 magnum and
9 mm parabellum are also prohibited), and in practice the lawful possession of firearms
above 0.22 caliber is limited by the difficulty of obtaining permits to do so. Hunters and
target shooters may obtain licenses for firearm possession, and gun collecting is allowed
with some exceptions. As a result of these strict controls, there were only about 4300
legally registered firearms in private possession in the country in 2007 (Grillo, 2007).
On the other hand, despite these strict regulations, there is a large volume of illegal
firearms in Mexico. In fact, in 2012, the Mexican military estimated that only one-third
of 1% of firearms in Mexico is legally registered, and 90% of all firearms are used for
criminal purposes.5 The Mexican federal government has seized a large number and
wide array of arms in recent years (see Figure 3), with dramatic growth in the
proportion of high-powered weapons (including 9-mm pistols, 0.38-caliber ‘super’
pistols also known as cop killers, 0.45-caliber pistols, and AR-15 and AK-47-type
assault rifles, grenades and bazookas).6 The jump in seizures from 2007 to 2008 is likely
4 In December 1998, the Mexican Congress enacted legislation relaxing unintentional violations involving a
single gun (by tourists): first-timers are fined US$1000, but not imprisoned. Previously, they would face
5–30 years in jail. However, these relaxed standards do not apply for military weapons or calibers.
5 Isaac M. Reyes Maza, ‘‘Con licencia de Sedena, 1% de las armas en el paı́s,’’ Quadratı´n. Available online
at:http://www.quadratin.com.mx/Noticias/Con-licencia-de-Sedena-1-de-las-armas-en-el-pais
6 From January to June 2008, 7645 weapons were seized, compared to only 3801 during the same period for
the previous year. Of note was the increase in the proportion of ‘long guns’ (armas largas, or rifles and
shotguns), which went from 1877 or 49.3% of weapons seized in the first half of 2007 to 4465 or 58.4% of
weapons seized in the first half of 2008. President Felipe Calderón, Segundo Informe de Gobierno, 1
September 2008, p. 24. The rise of long guns is one of the aspects of the increasing militarization of the
US firearms market, as well as that portion of the stock trafficked into Mexico for use by cartels (Violence
Policy Center, 2009, 2011).
6 of 31 . McDougal et al.
Recovered by US Border
Mexican Gov’t
Recovered by
Patrol/ Police
U.S.-Purchased
U S
to Traffic
to Mexico
Figure 4. Venn diagram depicting the relationship of total firearms purchased in USA with
various sub- and super-set of firearms. For illustrative purposes only; box sizes not
proportional to actual volumes.
7 In May 2010, the Mexican Government claimed that around 80% of the firearms it had seized in the
preceding 3 years had come from USA (Goodman and Marizco, 2010, 170).
Firearms trafficking across the US–Mexico border . 7 of 31
manufactured plus total imported minus total exported (M þ I X). Among these,
some quantity is purchased with the intention to traffic. Of that number, some subset of
arms is recovered by US law enforcement. Another, mutually exclusive, subset of
trafficked arms is recovered by Mexican authorities, along with firearms that were
acquired outside of USA.
Based on US prosecutions alone, 4976 firearms were bought with the intention to
traffic them to Mexico in FY 2009. This number corresponds to the proportion of US-
purchased firearms (represented by gray box in Figure 4) covered by horizontal stripes,
and is much lower than the Mexican government’s reported number of seizures for the
same year of 32,332 (Goodman and Marizco, 2010, 170, 176), which corresponds to the
entirety of the diagonally striped box. The Mexican Government claims that of
the approximately 75,000 firearms it seized from 2007 to 2010, roughly 80% were from
USA (Goodman and Marizco, 2010, 170). Those 20,000 or so firearms per year
correspond to the portion of overlap between the red and green boxes in Figure 4.
3. Empirical Specification
3.1. Data
We begin by noting the possibility that FFLs may tend to cluster at the US–Mexico
border in numbers disproportionate to the local US population they serve. Estimates
for the number of FFLs along the border vary, probably not only due to fluctuations in
FFL numbers, but also due to different definitions of the ‘border region’. In September
2007, Grayson estimated the number to be 1200. In January 2008, Mexican
Ambassador Arturo Sarukhán criticized the availability of weapons along the border:
‘Between Texas and Arizona alone, you’ve got 12,000 gun shops along that border with
Mexico’. The figure 6700—or three dealers for every mile of border—has been used in
reports about the number of gun shops along the border (see e.g. Corchado and
Connelly, 2008; Serrano, 2008).
We take the presence or absence of a firearms retail outlet as a proxy for the degree of
success of a local business, and therefore a proxy for realized demand. Such a method is
supported by Della Vigna and La Ferrara (2010), who similarly propose to employ a
measure of business success as a proxy for illegal arms trades (though they take as their
indicator stock prices of arms companies, and not the presence or absence of retail
licenses). Ideally, the dependent variable would be the total dollar volume of firearms
sales in each county-year. That information is unfortunately neither collected nor
reported by the ATF. Our next best option would be sales in terms of numbers of
firearms by county-year—also neither collected nor reported. The third best option
8 of 31 . McDougal et al.
might be a count of instant background checks sent to the FBI’s National Instant
Criminal Background Check System (NICS) by FFLs to comply with US federal law
(the Gun Control Act of 1968 in particular, which bars certain categories of people—
convicted criminals most obviously—of purchasing a gun). There are at least three
drawbacks to this measure: (i) one background check is performed per person
purchasing, rather than per weapon sold; (ii) background checks are not required for
person-to-person sales or at gun shows; (iii) we have been unable to obtain those
records, and as to the best of the authors’ knowledge, use of those data is restricted to
agencies authorized by the FBI. Our best available option then was to use FFLs
operating per county-year. There are precedents for using these data: Wiebe et al. (2009)
used the 1993–1999 portion of this panel as a proxy for supply-side ‘access to guns’,
which they use as an independent variable to predict homicides in USA.
All US–Mexico traffickers incur the risk of jail time and punitive fines for attempting
to cross the border, and so we disregard those costs entirely. Distance from the border
8 The likelihood of being caught by the US Customs and Border Protection, Immigration and Customs
Enforcement, and state border patrol forces probably decreases with distance from the border. Those
agencies do not enforce firearms purchasing laws or audit FFLs. As we are assuming that all traffickers
are passing overland, heightened security and road blocks in this zone may effectively increase the cost of
travel near the border further incentivizing FFL clustering.
Firearms trafficking across the US–Mexico border . 9 of 31
300000
250000
Type 1: Dealer
Type 3: Collector
150000
Type 4: Ammunion
Manufacturer
100000
Type 5: Firearms
0
1977
1985
1991
1997
2005
2011
1975
1979
1981
1983
1987
1989
1993
1995
1999
2001
2003
2007
2009
Figure 5. Federal Firearms Licenses (FFLs) by type, 1975–2010. Source: ATF (2013); graph
by the authors.
9 We did consider creating another dependent variable that would be FFL count per population, but there
are some serious drawbacks to such an approach. First, the result would no longer be a strict count
outcome, and therefore would not lend itself defensibly to analysis using a negative binomial estimator.
Second, the output of a model based on a normalized dependent variable would be less amenable to our
post-estimation Population Attributable Fraction (PAF) analysis (see Subsection 3.3).
10 of 31 . McDougal et al.
control is the year that the state was granted statehood by the federal government, as
such statehood status came along with some minimum level of law enforcement from
the federal government.
FFLiDist represents a control for spatial autocorrelation. Spatial autocorrelation
statistics measure the degree of geospatial dependency among observations (in this case,
counties). The basic intuition here is that FFLs, like many other forms of economic
activity, may tend to cluster in space. Geographic clustering offers at least three types of
pecuniary benefits to firms: (i) reduced costs of transport of intermediate goods between
related businesses; (ii) ‘thick’ labor markets that allow faster, smoother hiring; and
Firearms trafficking across the US–Mexico border . 11 of 31
(iii) reputational benefits due to the fact that customers come to know of the geographic
concentration (see e.g. Fujita et al., 1999). In order to control for spatial autocorrel-
ation, we construct an inverse distance squared metric of the outcome, FFLs, in all
counties other than the county of interest. We choose the inverse squared distance
metric over its cousin, the inverse distance, because theoretical and empirical evidence
suggests that spillovers from the economies mentioned above lead to increasing returns
to scale in highly localized settings and decline dramatically over space (e.g. Krugman,
1991, 1998; Gertler, 1995; Ratanawaraha and Polenske, 2003; Florida, 2005).
We define Y as the vector of FFLs for all counties, D as the matrix of travel times Di
between each possible pair of counties, and D0 1=D as the matrix of inverse travel
times whose elements are 1=Di , unless Di ¼ 0, in which case D0i ¼ 0. We then multiply in
0 0
scalar terms Y D D ¼ Z to obtain the squared distance-weighted influence of FFLs
in all counties on all counties. We then column-summed Z to obtain vector S, which we
then transpose to obtain ST , denoting the total spatial influenceP of all other counties’
10 For more on the inverse distance squared method, see Lloyd (2007), Ch. 2.1: ‘Approaches to local
adaptation’.
12 of 31 . McDougal et al.
Table 2. Descriptive statistics for the outcome and underlying predictor variables, 1999
Statistic Total FFLs Distance to border crossing (km) Distance to Mexican border (km)
11 There is some confusion in the epidemiologic literature regarding the difference between PAF and
Population Attributable Risk (PAR). While some authors suggest that the two terms are synonymous
(Bruzzi et al., 1985; Last, 2001), it is more common to see a differentiation made, such that the PAR
represents the decreased risk of a disease given the removal of a single factor, while PAF is the
proportion of the total number of cases that would be eliminated with that removal (Deubner et al.,
1975; Rockhill et al., 1988; Steenland and Armstrong, 2006; Rückinger et al., 2009).
Firearms trafficking across the US–Mexico border . 13 of 31
Likewise in our application of the PAF, we assume that the decile of counties farthest
from Mexico experiences no demand from Mexico at all. It serves as our ‘unexposed’
baseline, and that any rise above that level is then attributable to demand from the US–
Mexico traffic. Unlike in most of the epidemiologic applications, our exposure variable,
road distance from the US–Mexico border, is categorical and not binary, though this
does not present any problems. In addition, the equation above tends to overestimate
the PAF, as it assumes perfect additivity of effects of variables when included in a single
model—i.e. EA þ EB ¼ EAþB (Walter, 1976, 1983). To mitigate that risk, we have
implemented Stata’s PUNAF module (Newson, 2012), which relies upon the Greenland
and Drescher (1993) formulation allowing for EA þ EB > EAþB . Returning briefly to
the smoking example, we might find that the removal smoking reduces the total number
of lung cancers by, say, 60%, but that elimination of smog would be predicted to reduce
lung cancers by 30%. The PUNAF module does not assume that all lung cancers
prevented by the elimination of smoking are mutually exclusive of those prevented by
4. Results
Table 3 shows only a list of variables, not regression results the number of FFLs as a
function of distance from the nearest border crossing (distance is broken into deciles),
time period, and an interaction between distance and period. The coefficients for the
categorical distance variable are uniformly highly significant, and robust and stable in
both sign and magnitude under a number of different tested control models. The results
of Model 3 are illustrated in Figure 6, with the ‘price’ (in decile distance) on the
horizontal axis and the quantity (in FFLs) on the vertical axis. The downward trend in
numbers of FFLs overall as well as the demand effect of US–Mexico border proximity
are clearly visible. However, the fact that US FFLs are becoming increasingly
14 of 31 . McDougal et al.
Table 3. Random-effects negative binomial regression of total FFLs on distance from the US–Mexico
border crossings
Table 3. Continued
350
300
250
Esmated Number of FFLs
1993
95% CI
200
1994-1996
95% CI
150
1997-1999
95% CI
0
1 2 3 4 5 6 7 8 9 10
County Distance from U.S.-Mexico Border by Decile
Figure 6. Adjusted negative binomial predictions of number of FFLs per county by decile
distance from the US–Mexico border. Confidence interval between dashed lines; based on
Model 7-3.
dependent upon demand originating south of the border is less visible, as discussed
below.
Figure 6 indicates one encouraging indicator that the PAF is appropriately applied to
the whole of USA, rather than a subset of counties more proximate to the US–Mexico
border. As observed in this, adjusted predictions of firearms sales as a function of
decile distance from the Mexican border decline monotonically (with the exception of
minor upward jumps in deciles 7 and 9), and the declines are generally decreasing in size
with decile distance. As decile distance, unlike a continuous distance measure, enters the
regression equation as a categorical variable, there was no guarantee that the adjusted
predictions would produce the hypothesized slope at all. The fact that it nevertheless
implies that, as the ATF trace data suggest, most of the firearms purchasing in question
occur in border states. Counties in the fourth decile are predicted to realize only about
20% of the sales as counties in the first decile—much smaller, but not negligible,
numbers.12
12 We have also run the analyses using a continuous distance predictor. That specification does not allow us
to parse out time periods, but does exhibit the same downward sloping curve, steep at first and easing off
later. In fact, the resulting curve is much smoother than those we show, as the predictor enters the
equation as a single continuous variable, rather than a categorical variable that is treated as a series of
dummies.
Firearms trafficking across the US–Mexico border . 17 of 31
Given the regression results above, the PAF of FFLs attributable to the US–Mexican
arms trade is given in Table 4. It is important to note that the PAF does not tell us the
volume of total US demand for firearms attributable to US–Mexico traffic. Rather, it
estimates a percentage of FFLs that would go out of business in the absence of US–
13 The National Shooting Sports Federation conducts annual business surveys of FFLs, but the data are
neither publicly available nor numerically specific as to profit margins.
14 On profit margins, see Butler Consultants (2012).
18 of 31 . McDougal et al.
Table 5. Assumed profit margins and resulting percentage estimates of total US domestic arms sales
represented by US–Mexico firearms trafficking demand
those of gas stations (around 1.68%) and food and beverage stores (at around 3%). We
derived a mid-range estimate by averaging the profit margins of hardware stores
(4.45%), electronics stores (4.68%) and general stores (4.91%). We took the 7% figure
above as representing a high-end estimate. Using these estimates, we derived low-end,
mid-range and high-end estimates of US domestic arms sales attributable to US–
Mexico traffic (see Table 5).
Multiplying the above percentages by the total number of firearms sold in the US
domestic market, we can obtain the total number trafficked in each period. Results are
shown in Table 6.
We next monetized the value of these estimated volumes. We began by back-
calculating the total domestic revenues of the firearms industry from the reported
volume of excise taxes collected on domestic firearms and ammunition sales and their
relative excise tax rates (Figure 2) (ATF, 2002). We then applied same percentages
derived above to obtain the total monetary value of the US–Mexico firearms traffic. We
arrived at an annual dollar volume of around US$ 102 million in 2010–2012.
Robustness check of the results presented in this section using OLS models on the
untransformed and logged FFL outcome yields similar results (see Appendix).
However, when we normalized FFLs by population, the results did not hold. The
Firearms trafficking across the US–Mexico border . 19 of 31
Appendix discusses this anomaly and reports on some statistical tests, suggesting that
the size of FFLs in terms of sales numbers and annual revenue may vary in accordance
with the size of the nearby market.
5. Discussion
Our estimates of numbers of firearms trafficked far exceed the total volume seized by
both the Mexican or American governments combined in recent years—that is, around
5000 and 32,300 by the US and Mexican authorities, respectively, in 2009 (Goodman
and Marizco, 2010, 170, 176). The mid-range estimate implies that the combined
seizures of roughly 37,000 firearms by Mexican and US authorities represent roughly
18.2% (between 10.8 and 43.1%) of the weapons bought for trafficking in recent years.
There are at least three possible reasons for the high numbers reported here: the first
to restrict the total number of tires that may cross the border. Consequently, some large
tire shipments may to be transported by semi to depots near the border. There,
informal, unpermitted drivers in pickup trucks load them up and cross in non-
commercial lanes at official ports of entry (Institute for Regional Studies of the
Californias, 2009, 15). A similar splintering of the market to hamper the enforcement of
regulations may be at work in the US firearms market. This suggestion would prima
facie seem to run counter to the decline in numbers (and consequent rise in presumed
sales volume), as stable or even rising demand would imply more, now fewer, FFLs if
their size is shrinking. However, controlling for the overall decline in FFLs, one might
imagine a relative increase in FFL numbers (and consequent relative decrease in size) in
areas where the ATF regularly conducts audits. As we have no records for volume of
firearms sold at specific FFLs or even within specific counties, we cannot discount this
possibility.
The Appendix discusses a similar problem associated with the estimated effect of
Table 7. Estimated annual total realized firearms demand for US–Mexico trade by period (US$ 1000)
(figures for 2001–2012 have been imputed)
On the other hand, there are three reasons to believe that our estimates are credible.
First, we assumed in this article that the level of demand exhibited by the US–Mexico
firearms trade in the 10% of counties situated farthest from the US–Mexico border is 0.
In fact, this may not be so. We see evidence of heightened demand in the 9th decile
relative to the 10th (Figure 6), and there is nothing to say that if USA stretched farther
north, demand would not be felt there, as well. Mexican DTOs have documented
operations stretching into the northernmost reaches of USA. The National Drug
Intelligence Center (NDIC) (2009) reported the presence of DTOs over the period 2006–
2008 in such northern US cities as Bellingham, WA; Bismark, ND; Buffalo, NY; and
even Portland, ME (Finklea et al., 2011, Figure 2, 8). As the assumption of zero
demand in the 10th decile of US counties need not be the case, our estimates may not be
counting a latent level of demand underlying all deciles.
Second, our calculation of the percentage of US domestic sales represented by the
US–Mexico traffic rested on the very minimum amount of demand decrease that could
15 This figure is based on our mid-range estimate of 185,409 firearms purchased, minus approximately
37,000 seized by US and Mexican authorities, and divided by 450,000.
22 of 31 . McDougal et al.
but also certain control variables that serve as proxies for ‘gun culture’. Future research
might make use of better variables. As discussed in the Appendix, it might also attempt
to model population’s effect on FFL market entry in the manner of Bresnahan and
Reiss (1991). Finally, future research might also make a more direct spatial link between
the use of firearms in Mexico (e.g. municipality-level homicide statistics) and the sale of
firearms in USA. Establishing such a link would require careful thinking as to how to
account for the dynamics of stocks and flows of firearms, including the rate at which
they become unusable. Moreover, the relationship between demand for firearms south
of the border and their supply north of the border would likely exhibit endogeneity.
Acknowledgments
The authors gratefully acknowledge Wiebe et al. (2009) for generously sharing their data on
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Appendix
Table 8. Random-effects OLS regression of total FFLs on distance from the US–Mexico border crossings
Table 8. Continued
180
160
140
120
1993
Esmated Number of FFLs
100 95% CI
1994-1996
80
95% CI
60 1997-1999
95% CI
40
0
1 2 3 4 5 6 7 8 9 10
-20
-40
County Distance from U.S.-Mexico Border by Decile
Figure 7. Adjusted OLS predictions of number of FFLs per county by decile distance from
the US–Mexico border. Confidence interval between dashed lines; based on Model 8-3.
(Surprisingly, dummy variables for Virginia, West Virginia and Wisconsin were all
significantly negative.) While this cursory analysis suffers from the ecological fallacy, it
provides some evidence that Minnesota, Pennsylvania and possibly Ohio counties are
responsible for higher-than-expected FFLs in the ninth decile.
The PAF analysis cannot be performed on this model because predicted outcomes for
the 10th decile are slightly negative in periods 3 and 4. No percentage change in a
negative number can create a positive number (as the estimates for the first decile
invariably are).
Table 9. Random-effects OLS regression of logged total FFLs on distance from the US–Mexico border
crossings
Table 9. Continued
140
120
100
Esmated Number of FFLs
1993
95% CI
80
1994-1996
95% CI
60
1997-1999
95% CI
0
1 2 3 4 5 6 7 8 9 10
County Distance from U.S.-Mexico Border by Decile
Figure 8. Adjusted OLS predictions of logged FFLs per county, given decile distance from the
US–Mexico border. Confidence interval between dashed lines; based on Model 9-3.
Table 10. Population attributable fractions of FFLs on exposure to Mexican demand (OLS model on
logged-FFLs)
attributable to demand arising south of the US–Mexico border is rising over time, and
all estimates hover between 25% and 45%. The OLS model yields slightly lower
estimates for periods 1–3 than the negative binomial model, but higher ones in period 4.
the explanation is fairly straightforward, and implies that FFLs per capita is not an
appropriate outcome measure.
The crux of the matter is that FFLs may differ in the volume they sell based on
whether they are located in densely or sparsely populated parts of the country. This
possibility is supported by the fact that, while unreported in previous regression tables,
the coefficients for population are negative in the negative binomial and OLS models,
and that for the measure of nearby populations is negative in all three specifications.
The population coefficient was 5.58e-07 (s.d.: 3.56e-08) in model 3-3, 0.000113 (s.d.:
3.09e-06) in model 8-3, and 6.36e-07 (s.d.: 3.99e-08) in model 9-3. The coefficient for the
inverse distance-weighted population was 1.53e-09 (s.d.: 2.77e-10) in model 3-3,
9.76e-08 (s.d.: 1.70e-08) in model 8-3, and 9.11e-10 (s.d.: 3.15e-10) in model 9-3. In
effect, the models are implying that the fewer the people (and therefore smaller the
potential market), the greater the total market demand, which of course runs counter to
microeconomic logic.16 But for instance, in metropolitan areas where smaller counties
16 The coefficient for income is also always negative, implying that firearms are an inferior good.