Guns in America are a uniquely polarizing issue. Some people are repulsed at the very sight of a gun, while others are in love with them and the culture they represent. Surely they have important importance throughout our history, but gun violence simply cannot be ignored. Almost all Americans agree that gun violence is a scourge on the country. You have probably heard these countless times, but some facts to consider:

• The US accounts for 82% of the world’s gun homicide deaths
• There have been over 12,000 gun homicides in the US annually since 2012
• Americans own about 48% of all civilian-owned guns on Earth

(statistics taken from www.everytownresearch.org)

I am not writing simply to regurgitate depressing gun statistics. Instead, I argue that gun violence in America is an economic problem as much as it is a societal one. After I make my case, I will propose an economic solution to the growing problem, that does not infringe on any constitutional right, but targets specific economic factors related to America’s unique obsession with guns.

It is not my intention to belittle or otherwise misuse any gun-related tragedy in order to make this case. However, I will be examining the most recent shooting and analyzing its economic impact to determine the ‘cost’ of such an event. The shooting occurred in Parkland, Florida (coincidentally, about 15 minutes from where I work). Often times we do not even think about the cost of things like human life, but I will endeavor to go over a few of those costs.

Parkland is an affluent suburb outside of Fort Lauderdale, Florida, so I will make a few assumptions (constraints). First, I will assume that the victims’ parents would be putting money away for their college years, rather than having to take out large amounts of loans. Second, the cost of living is somewhat above average. Third, the State of Florida has offered to pay for all final expenses as well as medical care, so I will assume that those pledges have been honored.

Now that we have our picture somewhat refined, let’s apply some reference data to outline our case:

• The average cost of a day of inpatient care in Florida is $2,086 (https://www.beckershospitalreview.com/finance/average-cost-per-inpatient-day-across-50-states.html). As of Sunday, 2/18/18, the wounded victims are still in recovery.
• A gunshot victim is likely to owe as much as $95,000 if they had to stay overnight for care (https://www.theguardian.com/world/2017/oct/02/cost-of-gun-violence-hospital-expenses-johns-hopkins-study).
• Average funeral and other costs (final expenses) in the US rose 28.6% from 2004-2014, to $7,181. Accounting for smaller inflation since then, say 1.5% a year, the 2017 cost would be around $7,509 (https://smartasset.com/life-insurance/how-much-does-the-average-funeral-cost).
• The average lower-end amount a family should have saved in a tax-deferred 529 College Savings plan by the time their child is in high school is roughly $28,025 (https://thecollegeinvestor.com/16964/how-much-you-should-have-in-a-529-plan-by-age/). This is a recommended lower bound, and we can assume that residents of Parkland have more than this tucked away, but for the sake of argument, we will use this number.

Great, we have reference numbers to apply to this shooting. Now let’s run through the situation to apply the numbers.

• 17 students were killed. Final expenses for these victims are $7,509 per victim, or $127,563 in total. In addition, 529 savings will have to be withdrawn by the parents on account of no longer being qualified (their purpose for being tax-deferred is no longer valid), subject to a 10% early withdrawal penalty. The total 529 money saved up is $476,425, so a 10% penalty would be $47,642.50. The economic impact of these two costs alone nets over $175,000.
• 14 students were wounded and are still in the hospital recovering. Time spent in the ICU alone is $2,068 per day, for 5 days now, and we can assume they will have to stay in recovery for at least one more day (https://www.hopkinsmedicine.org/news/media/releases/gunshot_stabbing_victims_are_recovering_without_exploratory_surgery_study_shows). This comes out to $173,712 in hospital costs. In addition, the initial operation itself, as well as additional tests (CT scans, X-rays, etc.) total over $10,000 (anecdotal evidence at http://www.govtech.com/em/safety/The-Bill-for-Treating-a-Gunshot-Wound-21000-for-the-First-35-Minutes.html). Using $10,000, we arrive at a net of $140,000 for these victims. In total, these two costs for the wounded come out to just over $313,000.

There are obviously many more variables to consider, but add up the total cost for both wounded and dead victims and you will arrive at around $488,000, in just these specific categories of costs, for just this one isolated mass shooting. Would you be surprised to know that the Parkland shooting was Florida’s third mass shooting in three years? Fort Lauderdale International Airport suffered a shooting with five casualties on January 6, 2017, and the prior June, the Pulse Nightclub shooting in Orlando claimed 49 lives and wounded 58 others. Clearly, this is a far bigger economic problem than we thought.

How does any of this get paid for? Parkland is a unique example, with the State of Florida offering to pay for all final expenses and the socioeconomic status of the area suggesting most families carry health insurance. But what about all the other school shootings happening across the country? It would be foolish to assume the same applies to them. And there have been so many over the past few years, so many that I will not list them here.

Should the victims’ families be fully liable for all costs incurred because of a shooting? Why are the gun manufacturers totally removed from shootings, with nothing to lose when tragedies like these happen?

Today I propose a way to even the financial playing field, in a way that both forces manufacturers of guns to be (at least marginally) responsible for the atrocities people commit with their products, and that incentivizes good, responsible gun owners to be more proactive in demanding constructive change from their respective Congressmen and lobbyists. What I propose today, is Gun Insurance.

Gun insurance would work in the same functional capacity as car insurance or health insurance; it would shield the payer from far-reaching financial exposure to a catastrophic event, in exchange for a small monthly premium. Gun insurance would emulate various factors from both other types of insurance. Whereas car insurance is mandatory upon purchase of a car, being necessary to protect the driver from any large cost associated with adverse outcomes of operating a dangerous instrument, I would like gun insurance to function the same way. Whereas health insurance has variable premiums for different demographics of buyer, gun insurance can apply different premiums to different age ranges, prior criminal history or health issues (a ‘preexisting condition’), etc. Ultimately, I believe this is what is needed.

Roughly one quarter of Americans own at least one gun, that’s 81.5 million people. Nearly all, if not all of them, are responsible, take care of their weapons, and would never think of committing a mass shooting or other atrocity. But whether you believe the gun laws in this country have to change, or whether you think the mental health issues have to change, there is only one way any of them can really change. For the last decade plus, organizations like the NRA have successfully lobbied the Congress to not pass any significant gun reform legislation. Whether or not you think that is a problem, the fact remains that lobbyists against gun reform are extremely effective at influencing Congress to not take action in the face of increasingly overwhelming calls to action. Therefore, I submit to you that the onus of change in legislation, be it gun reform or mental health reform, is on their shoulders.

Gun Insurance would force these organizations and lobbies into action through financial incentive. Currently, if there was an automobile accident, the victim’s family is able to sue the auto manufacturer. If there is medical malpractice, the victim’s family can sue the hospital. But if there is a shooting, the victim’s family cannot sue the gun manufacturer. Insurance would change that twofold. Gun manufacturers would be subject to the same scrutiny over misuse of their products as automakers or drug companies, and would have to dole out cash settlements over cases in the same manner. All legal gun owners would be charged a premium, the same way all car owners are charged for insurance. In a year with no mass shootings or extraneous gun deaths, the manufacturer would not have to make any payments, so the premium would surely be infinitesimally small, say, $5 for the entire year. 81.5 million gun owners each paying only $5 a year yields $407 million in premiums to the gun manufacturers. But in today’s environment, where the quantity and severity of mass shootings seems to increase every year, gun owners would feel the pinch.

To be clear, my intention with this idea is absolutely not to penalize responsible gun owners for the acts of a few deranged monsters. I am predicating this solution on two factors. One, that nearly all Americans agree that something has to be done legally to solve the growing problem of gun violence, and that the gun lobby is the most effective agent to create that action. Two, that the surest way to make a presence felt is through someone’s wallet. Currently, the gun manufacturers and gun activist groups are shielded from negative effects of these events because they are not hurt financially. Gun insurance would allow them to bleed, the same as us normal citizens, whenever an atrocity like this occurs, and it would incentivize change to happen in the most organic way, from the bottom up.

Gun lobbyists would likely not seek to change gun laws, even if they were being financially squeezed. That would drive down availability of their products for demand-rich consumers. Instead, they would likely seek to change the country’s mental health laws. Are you upset that certain politicians blame mass shootings on mental health, but seem to not do anything to actually address mental health problems? This would be a way to change that. Again, regardless of what legislation you would like to see passed, influencing the people that control legislation is the best way to achieve something. Maybe not the optimal change, or the change any of us personally desire, but something. Something would be a significant improvement from what we have now.

If you’ve read this far, congratulations, you’re finally finished! I know this was on the depressing side of economics, but it’s important to know that everything in life has a cost, and a way to address that cost, if we think hard enough. As always, if you have any questions or comments, please leave a comment on this post or send me an email!

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