This article examines whether recent Federal regulations of firearms have reduced the amount of criminal gun suppliers.
In 1993 and 1994, the Federal Government instituted new fees and procedural requirements for federally licensed gun dealers and complemented these measures with enhanced regulatory efforts. These initiatives were intended to discourage illegal gun sales and drive illegitimate license-holders out of business. Federal firearm licensees (FFLs) are persons or organizations licensed by the Federal Government to manufacture, import, or sell firearms. This study focused on retail firearms dealers, who currently number over three-fourths of all FFLs. Licensed dealers are the original providers of all guns used in crime, with the exception of guns stolen from FFLs (including manufacturers and importers) or common carriers. FFLs can facilitate the leakage of guns from legitimate to illegitimate markets by engaging actively in illegal gun sales, or facilitating gun leakage by actions that are illegal or otherwise negligent or unethical. Using Alcohol, Tobacco, and Firearms (ATF) data, a roster of all gun dealers active as of the summer of 1994 was compiled and the number of times those dealers had been identified in ATF gun traces conducted since 1990 was determined. The drop in gun dealers that followed FFL reforms coincided with the Nation’s dramatic reduction in gun crime, raising the possibility that the two trends were related. Dealers who dropped out of business in the wake of the Federal reforms used to supply about one-third of guns confiscated and traced by law enforcement agencies. This implies that these dealers did supply a substantial fraction of the criminal gun market and that the loss of these dealers might have caused a decrease in the availability of guns to criminal users. This result is being examined in ongoing research. It is not clear if guns sold by dropouts had a higher probability of being used in crime, but guns supplied by dropouts did not move into criminal channels more quickly. 1 figure, 6 tables, 30 footnotes, 22 references