JOURNAL: What sets prices for AK-47s in local markets?

Here's an interesting study called Weaponomics by the Oxford economist, Phillip Killicoat, on how prices are set for assault rifles in local markets across the world. The upshot is that the market for AK-47s (75m out of 500m firearms available globally) is driven by an elastic source of supply rather than demand (motivation, crime, demographics, wealth, war, etc.). This means that factors that impact the origination of supply are much more likely to impact prices (regulatory effectiveness and the distance from sources of supply like Moscow). Porous borders and weak governments reduce prices (Africa has a $200 discount relative to other locales due to the porosity of borders). In essence, there is a global pool of assault weapons that quickly flows to wherever there is demand (sold and resold from agent to agent) thereby dampening any potential for price increases.

I suspect we are already seeing a similar globalization of supply for services like IED construction and emplacement.

Comments

[Duncan Kinder]

I'm no expert on smuggling, but it strikes me that the issues involved in covertly moving a fungible good ( i.e., an AK-47) about differ substantially from those involved in covertly moving people ( i.e., IED makers ) about.

First, regarding the AK-47's, the presence or absence of factors such as strict border protections, ( metal detectors, competent and incorruptible border guards ) weaken or strengthen supply. On the other hand, an AK-47 is an AK-47 is an AK-47 and would probably be just as effective in Nigeria as in Bolivia or in Malaysia or wherever.

In contrast, most of the IED experts probably are Arabic, which - unless they are multilingual - would limit their effectiveness in, say, Latin America or Sub Saharan Africa. Also, while they can easily blend into the Iraqi populace, they would stand out if attempting to act there. However, there probably is no reliable way to look at a guy and say "Hey, he's an IED expert and not just one of these Iraqi college graduates the NYT says is scrambling to get out of the country.

So while John Robb's basic point - that IED expertise and the like is apt to spread from Iraq - probably is sound, I doubt that it will be inexpensive and easy to get in the same places, to the same degree, and in the same manner where AK-47's are inexpensive and easy to get.

[Rob72]

As demonstrated by various news agencies, and addressed directly by Dan Korem (Rage of the Random Actor), a majority of the Islamic extremists are upper-middle to upper class SES, well educated- and given the strong colonial European influence- are frequently multi-lingual.
While currently "hot commodities" and obviously more expensive than the crate of AKs, the technicians too will plateau. AEDs are a counter-force or terror tool, and have only limited application beyond a certain point of conflict.

Mr Robb is correct- techs are extremely easy to move. Particularly into our country. Easier than weapons and materiel, because we take unarmed border crossers less than seriously.
Regarding the original economic aspect of small arms, the larger connotation cannot be ignored: the UN, WHO, et al., have vested interest in stopping "proliferation". Unarmed peasants are the best sort over which to hold dominion.

[DJ]

IED construction, from what I can gather, is dangerous but not difficult, and anyone with reasonable directions, appropriate raw materials, and sufficient cahones could give it a try. I would expect that the technology for constructing IEDs-- in the form of step-by-step instructions-- would become more widely available via the internet. This is particularly true since some of the most dedicated users of IEDs would be served by creating chaos almost anywhere in the world, and thus have no reason to keep it to themselves.

In that case, it is not the availability of technicians that limit their use, but the availability of raw materials. Some of these are likely to be available locally, but others would need to be smuggled (or shipped legally) much like an AK. So the analogy remains useful.

[Nic]

I have done quite a bit of work on the subject, and have worked with Phil Killicoat. As he mentions in the papers conclusions, there are significant regional dynamics. In general I believe the existence of global black markets in weapons has been very heavily hyped. Instead you find a lot of circulation within regions - such as West Africa. But little intercontinental trafficking.

[DJ]

"The Price of an AK"
http://asymptoticlife.com/2007/06/06/the-price-of-an-ak.aspx
John Robb's blog references an Oxford University study on the worldwide price of an AK-47 assault rifle. It's results are interesting. The regional price of the weapon is similar in the Americas, Asia, and Eastern Europe. It is much higher in Western Europe and much lower in Africa & the Middle East. (Our local price in Utah is about $375 for a Romanian-made model, somewhat below average for the Western Hemisphere.)...

[DiamondBack 01]

To change the subject ---what is the ROI of a Russian made RKG 3M AT hand grenade vs the cost of a 1114 up armored HMMWV, the four passengers and all the required equipment inside?

13 USD vs what--- 2.4m USD---and the grenade can be gotten in some markets for 10 USD.

Believe me the Sunni insurgents fully understand the ROI of 13 vs 2.4m USD.