Well, if you accept that gelatin testing is a fairly reasonable approximation of what happens to human flesh, it's pretty easy to verify that permanent wound channel for a handgun bullet is approximately the same diameter as the bullet, barring tumbling.
Pretty hard to argue unless you want to attack the testing method itself (gelatin.) stephen is correct, not all tissues exhibit the same elasticity characteristics. I can't say that I know for certain which type of tissue gelatin is supposed to replicate best...
On the other hand, rifles can have enough oomph to cause a permanent wound channel diameter significantly exceeding the diameter of the bullet.
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