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Informing America’s Policy on Illegal Drugs: What We Don’t Know Keeps Hurting Us
compulsive in their use; they will “do anything” and “pay anything” to consume drugs.2 If this is true, then supply-reduction efforts can have very little effect on the quantity of drugs consumed. Rather, such efforts simply act to increase the profits of illegal dealers by enabling them to raise the prices of drugs. This argument ignores the possibility that users and potential users who are not yet addicted to drugs could be dissuaded from experimenting with them by high prices or by the inconvenience and danger of buying drugs. It also ignores the possibility that increases in the price and inconvenience of buying drugs may cause older users who are tired of “the life” to make serious efforts to quit their use. Effects such as these appear to occur with changes in price for legal addictive commodities, such as alcohol, tobacco, and caffeine. Why shouldn’t they occur for heroin, cocaine, marijuana, and amphetamines? Indeed, the best current estimates of the elasticity of cocaine consumption with respect to price is that it lies between –0.59 and –2.5: if accurate, this means that a 10 percent increase in the price of the illegal drugs will lead to at least a 5.9 percent reduction in overall levels of use. Apparently it is not true that all drug users will do anything or pay any price (although some of them will do a lot and pay a lot) for drugs. If drug users can be discouraged from using drugs by high prices, unavailability, or risks associated with buying and using drugs, and if enforcement and supply-reduction efforts can raise the price and risks, then these efforts may succeed in dissuading new users from starting, experimental users from advancing to higher levels of use, and advanced users from continuing to use drugs even when treatment is available to them.
Other researchers suggest that drug enforcement and supply-reduction efforts will fail because they cannot succeed in meaningfully raising the price or reducing the availability of drugs. In this view, there is a plentiful supply of people willing to run the moral, economic, and physical risks of dealing drugs for the profit that can be earned. One can agree that there are many people in sufficiently desperate circumstances that dealing in drugs represents a relatively attractive income earning opportunity. But there are many things about dealing in drugs that are unattractive and are made unattractive by its illegal status. In thinking about how drug enforcement affects opportunities for drug dealing, one begins with the idea that each dealer is threatened with the prospect of arrest and
Researchers have debated the effect of price increases in light of drug addiction; see Barthold and Hochman (1988), Chaloupka (1991), Warner (1991), Pollak (1976, 1970), and Winston (1980). Research that reports findings of low sensitivity to price in the short run includes Becker, Grossman, and Murphy (1991), Becker and Murphy (1988), and Chaloupka (1991).