Not only is Lott's work increasingly being discredited, he is suspected of ethical misconduct regarding his work. A decent summary of what has transpired is:
http://www.motherjones.com/news/feature/2003/10/we_590_01.html
and the gory details, including his response to above is avaialable at:
http://cgi.cse.unsw.edu.au/~lambert/cgi-bin/blog/guns/Lott/more_guns_less_crime/index.grey
A reply that I wrote awhile back on the topic:
I found my copy of 'More Guns Less Crime', and the receipt that I used as a bookmark is dated May of 1998. I had purchased it when it came out hoping that it would offer more detail on his original paper, but it actaully had less of the detail that I was looking for. Since it was largely based on his original paper, much of the text is similar, and since the book seems to be not only a bit sloppier with more apparent errors, I haven't bothered to read all of it.
For instance, in his book Lott criticizes Black and Nagin for only using counties with more than 100,000 population, Lott stated that he "..did not select which observations to include; I used all the data for all the counties over the entire period for which observations were available." In fact in his study of Oregon, Arizona, and Pennsylvannia, using the better measure of actual permits issued instead of proxy by population, Lott excluded counties over 200,000 in Pennsylvannia. When Lott includes all of the counties over the entire period for which observations are available almost all of the desired effects that he was looking for became statistically insignificant, and although he didn't report the values murder was evidently the only one that was still significant.
When using the better measure larceny was the only crime in Oregon that was decreased with an increase in concealed carry. Lott offers "One possible explanation for these results is that Oregon simultaneously passed both the nondiscretionary concealed-handgun law and a waiting period." That is a pretty weak statement, and in the context of his sweeping statements that more guns cause less crime it amounts to little more than a guess, as like he stated it's only 'one possible explanation'. In fact, in the context of the three states where he used the better measure of actual permits issued, better in his own words, the more probable explanation is that concealed carry does not consistently reduce crime, as in Arizona there was no reduction in crime with increased concealed carry, in Oregon it only affected larceny, and in Pennsylvannia it was only murder, but at unknown rates and significance as he didn't publish the results.
Lott said:
Unfortunately, county data on the total number of outstanding right-to-carry pistol permits were available for only Arizona, California, Florida, Oregon, Pennsylvania, and Washington, though time-series county data before and after a change in the permitting law were available only for Arizona (1994-96), Oregon (1990-92) and Pennsylvania (1986-92).
..., a better measure would have been to use the actual change in gun permits before and after the adoption of a concealed handgun law. Fortunately, we were able to get that information for three states: Arizona, Oregon, and Pennsylvania (see Table 14).
Finally, the much more limited data set for Arizona used in Table 17 produces no significant relationship between the change in concealed handgun permits and the various measures of crime rates.
The evidence from the small sample for Arizona implies no relationship between crime and concealed handgun ownership.
Lott had the option of not using the Arizona data, he didn't have such data for 47 other states, but he chose to use it. Lott didn't say that the Arizona results were invalid, he said that the sample was smaller, and that there was no relationship between concealed carry permits and crime.