Concealed Carry License Fees: The Case for Abolition

Currently, all states in the US offer some type of public license to carry concealed weapons (although, in practice, some states rarely grant such licenses). Licenses generally come with fees in the $50-$100 range; for exact details, see this list of state laws on the matter.

However, are concealed carry license (CCL) fees actually an efficient policy? It doesn’t seem so. The marginal cost to the issuing authority of granting a permit is essentially just the cost of paperwork, and is very close to zero. Training costs, in states with training requirements, are imposed upon the applicant, and so are not part of the marginal cost of the issuing authority.

Of course, the next concern would be the social costs and benefits of issuing concealed carry permits. The primary social costs and benefits in this case are the impacts of concealed carry laws on crime rates. There is substantial debate on this issue, sparked in large part by the Journal of Legal Studies paper “Crime, Deterrence and the Right-to-Carry Concealed Handguns” by John Lott and David Mustard, and by the various editions of Lott’s book, More Guns, Less Crime.

However, the debate over effects on crime rates is almost completely between those claiming that concealed carry reduces crime, and those who claim it has little or no effect. As noted in the paper “Trust But Verify: Lessons for the Empirical Evaluation of Law and Policy” (page 3):

There have been a total of 29 peer reviewed studies by economists and criminologists, 18 supporting the hypothesis that shall-issue laws reduce crime, 10 not finding any significant effect on crime, including the NRC report, and [Aneja, Donohue, and Zhang]’s paper, using a different model and different data, finding that right-to-carry laws temporarily increase one type of violent crime, aggravated assaults.

Note: There was a footnote marker at the end of the phrase “including the NRC report”, which corresponded with a footnote reading: “Although one member of the Council concluded that the NRC’s own results indicated that shall-issue laws reduced murder.” This refers to James Q. Wilson’s dissent in a National Research Council report on the matter; the latter did not find discernible effects on crime rates.

In fact, John Donohue, a major opponent of the Lott-Mustard hypothesis on concealed carry, said in the Chronicle of Higher Education that, “No scholars now claim that legalizing concealed weapons causes a major increase in crime”. (The link here is paywalled, but the quotation has been cited in numerous other places.)

Given all this, it appears that the social cost of issuing CCLs is either negative (if concealed carry reduces the costs of crime) or zero (if it has no effect). Furthermore, the private marginal cost of issuance is nearly zero.

And the private benefits of CCL issuance are also substantial. There are roughly 8 million active permits as of recent, and revealed preference tells us that concealed carriers value having licenses. Political lobbying for expanded carrying rights is another sign that many people value the right to carry guns.

In summary: The relatively high fees imposed on concealed carry licenses are a case of inefficient monopoly pricing, and, under a traditional welfare analysis, should be abolished or possibly even made negative to account for social benefits of concealed carrying. This also tells us that the current number of people licensed to carry guns is below the optimal level.

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