“SMART” GUNS: A TECHNOLOGICAL FIX FOR REGULATING THE SECONDARY MARKET

James A. Leitzel (*) A "personalized" or "smart" gun will not fire unless it is being used by an authorized individual. Such guns have the potential to reduce the negative externalities of gun ownership while preserving the benefits. Ongoing efforts to develop practical "smart" designs make it timely to consider regulations that would favor or mandate them in the market for new guns. The likely consequences would depend on the design details, in particular the costs of transferring the "key" to firing such guns. With an "ideal" design, transferring the key would require special equipment that could be monitored by appropriate authorities. The result would be to block thefts and other transfers of such guns in the secondary market and, in the long run, reduce access by individuals who are proscribed from possessing a gun. Personalized guns, therefore, could make existing firearms regulations more effective and reduce the social costs associated with gun misuse. Though personalized guns have advantages relative to standard guns in a wide variety of situations, some of the potential benefits of personalized guns could be captured through alternative policy measures. (JEL K420, L500, D620) I. INTRODUCTION There are approximately 200 million firearms in private possession in the United States, including 70 million handguns (Cook and Ludwig, 1996; Kleck, 1997). Approximately 65% of U.S. homicides are committed with firearms, and of these, 80% involve handguns (www.ojp.usdog.gov/bjs/cvivt_c.tem). Guns, particularly handguns, feature prominently in other violent crimes, too; in 1999, more than half a million crime victims faced an offender armed with a firearm (Zawitz, 1995; U.S. Department of Justice, 2000). The enormous social costs associated with gun violence provide a rationale for regulations on gun commerce. Licensed firearms dealers are prohibited from selling handguns to persons less than 21 years of age, for instance. Federal law also proscribes many people from either receiving or possessing firearms. This prohibition includes convicted felons (or those under felony indictment), individuals convicted of domestic violence crimes, drug addicts, and those who have been committed to a mental hospital, among other groups. Youths under the age of 18 cannot legally possess a handgun, except in certain limited circumstances. This strategy of discriminating among groups (rather than imposing a blanket prohibition) will be effective in reducing gun violence to the extent that perpetrators are concentrated in the proscribed groups and the regulations are enforced effectively. Ideal controls on firearms could be defined as those that are effective at keeping guns out of the hands of high-risk users, while placing few barriers in the way of gun acquisition by purchasers who are by some standard deemed sufficiently law abiding and prudent to be entrusted with this hazardous commodity. Cost is also relevant, of course. One major difficulty is that controls aimed at reducing "blocked exchanges", such as criminal or juvenile purchase of firearms, can also raise barriers to legitimate firearm transactions (Walzer, 1983, 100-03). "Personalized" or "smart" guns are a new method for making it more difficult for proscribed users to acquire workable guns (Teret et al., 1998; Teret and Webster, 1999). A personalized gun will not fire unless the internal locking device is released. The "key" to this lock could be any one of a variety of mechanisms, including a magnetized ring worn by the shooter, a wristband that transmits a radio signal to a receiver built into the gun, a unique fingerprint recognized by a computer chip embedded in the gun, a sequence of numbers on a keypad on the handle of the gun, or even a voice that an embedded computer chip is programmed to recognize. (1) (Note that more than one user could be authorized to fire a given personalized gun with any of these devices.) With a personalized gun, the risk of nonconsensual firearm transfer could be greatly reduced, because unless the "key" is also transferred unauthorized people will be unable to fire the gun. …