Do buybacks work?

Alex Tabarrok thinks not, in response to this (in all likelihood fictional) program:

Mayor Blomberg announced today a new program to help reduce obesity and heart disease, ice cream buybacks. Any ice cream that citizens wish to turn in will be bought for up to $5 a pint. No questions asked.  ”Heart disease is the number one killer in the nation,” said Mayor Blomberg, “and we must do everything we can to get Ben and Jerry and these other killers off our streets.”

Critics argue that consumers are likely to reach into the back of their freezer to sell ice cream that is half-eaten, iced-over, and past its sell-by date, with little effect on heart disease. In previous buybacks, enterprising individuals have even bought cheap ice cream at Walmart and sold it back to the city at a profit. Economists have pointed out that local ice cream buybacks don’t make a lot of sense when ice cream remains widely available for sale. The National Academy of Sciences reported that the theory underling “buyback programs is badly flawed and the empirical evidence demonstrates the ineffectiveness of these programs.” Nevertheless, ice cream buybacks remain popular with voters.

Regardless of the authenticity of the above proposal, similar tactics have been employed to try to get firearms off the streets, with similar condemnation from economists such as Tabarrok:

Buying a few thousand guns in Oakland is not going to make it more difficult for criminals in Oakland to get a gun.

There are 150 million to 200 million guns in the United States, so there are plenty of low-quality guns to be sold. An Oakland gun buyback is like trying to drain the Pacific—every bucket of water you take out is instantly replaced. Even large gun buyback programs are unlikely to have significant effects. Australia spent half a billion dollars buying guns, with no significant effect on homicide by firearms.

Imagine that instead of guns, the Oakland police decided, for whatever strange reason, to buy back sneakers. The idea of a gun buyback is to reduce the supply of guns in Oakland. Do you think that a sneaker buyback program would reduce the number of people wearing sneakers in Oakland? Of course not.

All that would happen is that people would reach into the back of their closet and sell the police a bunch of old, tired, stinky sneakers.

Gun buybacks won’t reduce the number of guns in Oakland. In fact, buybacks may increase the number of guns in Oakland.

Imagine that gun dealers offered a guarantee with every gun: Whenever this gun gets old and wears down, the dealer will buy back the gun for $250.

The dealers’ guarantee makes guns more valuable, so people will buy more guns.

But the story is exactly the same when it’s the police offering the guarantee. If buyers know that they can sell their old guns in a buyback, they are more likely to buy new guns. Thus the more common gun buybacks are held, the more likely they are to misfire.

 

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