NCJ Number
153057
Journal
Journal of Political Economy Volume: 101 Issue: 5 Dated: (October 1993) Pages: 939-959
Date Published
1993
Length
21 pages
Annotation
This article examines drug-demand reduction policies, using a model of an illicit drug market that prominently features penalties on market participants.
Abstract
Under this model, the author increased the penalties on drug users to determine what would happen in the drug market. First, if users are being arrested in greater numbers, they expect a higher cost of making a transaction, so they will purchase less frequently. As users reduce their demand for transactions, dealers' costs of doing business will go down. Second, if users face a smaller probability of going to prison and shorter sentences, they face a lower expected penalty for drug possession, so they will build up their inventory and make transactions still less frequently. Again, as users reduce their demand for transactions, dealers face less risk, and their cost will go down. During the second half of the last decade, drug arrests soared, so users faced a higher cost of transactions. Further, once arrested, users faced a lower rate of going to prison and, when sentenced to prison, a dramatically shorter stay. Both developments would induce a growth in supply, and this effect apparently dominated any decline in supply due to the hostility toward dealers. The author concludes that under the current criminal justice system in the United States, a shift toward harassing users probably would not decrease both consumption and price. The result is used to explain paradoxes from the decriminalization of marijuana in the 1970's and the War on Drugs in the 1980's. 1 figure, 4 tables, and 29 references