Gun-Related Violence is a Recession05 Dec 2015
I keep hearing about the costs of gun violence in the United States. But given my experience with benefit-cost analysis, I think about actual costs. I want to know what is the economic cost of gun violence. First, let me explain why we look to economics. Economics is somewhat often confused with the study of money. That’s finance. Economics is the science of decision making. We measure things in units of currency because that is how we measure the utility of making a decision. In the United States, that means we use dollars.
In a move that always spurs controversy, we can measure the utility of a human life. This is controversial because it places a dollar figure on someone’s head. But that’s the best tool we have. And, equivalently, it means that we know how much society willing to pay to protect that life. The best estimates we have come from 2013, when Kip Viscusi estimated the value of a single life at $9.1 million. Viscusi is far and away the leading expert on this, and other estimates jive. The EPA found a value of $9.1 million in 2011. And the United States Department of Transportation found a value of $9.4 million. The DOT link also shows some of the spread found, ranging from $4ish million dollars through to nearly $30 million. The range shows the disagreement. For this purpose, we will use $9.1 million, even though its an older estimate due to Viscusi’s widely recognized expertise. In other words, he knows more than we do, so let’s trust him.
In 2015, as of right now, the Gun Violence Archive shows there have been 12,282 gun-related deaths in the United States since January 1. For this purpose, we are setting aside injuries since the injuries count is not broken down by type and economists value different injuries in different ways. The cost of gun violence is now a simple multiplication problem: $9.1 million times 12282 = $111 billion. That’s $111 billion, so far this year, the economy has lost. And let’s be clear, those are real losses in jobs, productivity, spending, and benefits paid.
What does $111 billion even mean? In public policy, we have a saying. A billion here and a billion there and pretty soon we’re talking about real money. So let find some better terms to explain it. It’s about half the interest of the federal debt this year. It’s twice as much as we will spend on federal law enforcement. But really, those numbers are still not solid.
How about this: that’s the GDP of Arkansas. That is Arkansas being stripped out of the economy. That is Rhode Island, Vermont, and Montana combined, all being yanked out of the economy. That’s an economic loss of 5.5 percent of GDP. If this were a recession, that’d be just slightly better than the Great Depression, which was a 6.6 percent decline per year. Gun violence is not the worst economic contraction we have ever had. But it never gets better and it’s awful.
Image by Don LaVange / Flickr.