The 40 Percent Myth?

If you’ve been following the recent debate over the president’s proposal to require universal background checks for gun transactions, you’re familiar with the “40 percent” statistic. Proponents assert that up to 40 percent of gun sales do not involve a federally licensed dealer and therefore are exempt from the current federal requirement for a background check of buyers. Opponents have been attacking this statistic, saying it’s far too high.

We’ve been following this give-and-take with some interest because our research is the original source of that 40 percent statistic. Our views on the subject may come as a surprise. First, we don’t know the current percentage — nor does anyone else. Second, if the president’s opponents are right and the true figure turns out to be less than 40 percent, that would actually strengthen the case for a universal-background-check requirement.

Currently, federally licensed firearm dealers (FFLs) are required to dial into a database to ensure that the would-be buyer is not a felon or otherwise barred from owning a firearm. But in all but a handful of states, private transfers operate on the honor system: Sellers can’t knowingly transfer a gun to someone prohibited from owning one, but they don’t have to ask the buyer if he’s in that category — let alone look into the matter. So long as the buyer is not wearing a “Riker’s Island alumnus” hat, the seller is free to complete the deal.

A universal background check is a good idea only if it can pass a cost-benefit test. The benefits in this case are measured in lives saved from prevented homicides and suicides. The costs are the potential fees and inconvenience to buyers who would have to arrange a background check by a licensed dealer before buying a gun from a non-licensed seller.

The primary goal of President Obama’s proposed requirement for universal background checks is to make it more difficult for criminals to obtain guns. So the key figure for assessing the potential benefits of the president’s proposal is the proportion of gun transactions involving criminals that occur in the secondary gun market. Several surveys of prisoners suggest that 80 percent or more of them acquired guns from some non-FFL source: casual transfers from family and friends, or through theft or underground brokers and dealers. That 80 percent figure is not controversial, and it is what’s relevant to estimating the potential benefits of universal checks.

A universal-background-check requirement would by no means eradicate gun crime, but it would reduce it because some dangerous people — those disqualified from gun ownership — would find it more difficult to obtain a gun quickly when they wanted one. That’s why background checks are overwhelmingly supported by law-abiding gun owners — Mayors Against Illegal Guns found that 82 percent of gun owners support requiring a criminal-background check for all gun sales. The benefits of this law could be counted in terms of lives saved in street crime, domestic violence, and suicides

The reason we’d like to know the overall size of the secondary market is to estimate the costs of the universal background check, since these transactions would now have to be conducted with the help of an FFL. In 1996, we estimated that 30 to 40 percent of all gun transactions in 1993–94 occurred in the secondary market. We based that estimate on a detailed national survey of gun ownership that has not been replicated since then, and a lot has changed over the last 20 years. We can speculate about trends in the scope of the secondary market; no one knows for sure.

If opponents of a universal-background-check law are right that 40 percent is too high, and that a smaller number of gun transactions occur in the secondary market each year, then the costs of implementing the universal background check are lower. Ironically they have helped make a stronger case for the new law. It would be cheaper if it only affected, say, 20 percent of the transactions, than if it affected 40 percent of them.

So does a universal background check pass the cost-benefit test? We think the answer is likely to be yes. Given the enormous costs that gun violence imposes on society, we estimate that a universal-background-check policy would generate benefits in excess of the implementation costs — easily — if the new policy reduced gun homicides by as little as 1 percent. Considered this way, a universal-background-check requirement seems like a promising policy, regardless of whether the true share of gun transactions that occur in the secondary market is 40 percent or 20 percent.

Philip J. Cook is the ITT / Sanford Professor of Public Policy at Duke University. Jens Ludwig is McCormick Foundation Professor at the University of Chicago and director of the University of Chicago Crime Lab. Both are elected members of the Institute of Medicine of the National Academies of Science. This commentary was first published in the National Review Online.