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What Price Data Tell Us About Drug Markets

NCJ Number
Journal of Drug Issues Volume: 28 Issue: 3 Dated: Summer 1998 Pages: 593-612
J P Caulkins; P Reuter
Date Published
20 pages
Empirical data on drug prices are examined, with emphasis on the implications for understanding drug markets and for policy.
The most striking characteristics of drug prices are their high levels and extreme variability over time and space. High prices deter consumption, but they have ambiguous effects on drug-related crime. However, the consequences of the variability are largely unexplored and are difficult to determine. In addition, conclusions are mixed with respect to the ability of policy to influence prices. Prohibition plus some degree of drug law enforcement can drive prices far above what they would be if drugs were legal. In certain circumstances, additional severity of enforcement can create transient spikes in prices or can change the source of drugs by driving up prices from one source relative to another. However, increasing drug law enforcement over and above an already strongly enforced prohibition appears to have only a limited ability to drive prices up further. Table, figure, notes, and 63 references (Author abstract modified)


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