Wednesday, December 27, 2006

Heroin economics

At the Economist blog Free Exchange, a post picks up on a short piece by Mark Kleiman on the blog The Reality-Based Community about the pricing of hard drugs. Kleiman disputes what he feels is the alarmist tone of an LA Times article about price drops in heroin but is stunned (as I was) by the raw facts:

[G]rams of highly pure Afghan heroin are now trading at $90 in LA. That's about a dime per pure milligram, compared with $2.50 a pure milligram in New York during the "French Connection" days. For a naive user, 5mg of heroin is a hefty dose, so your first heroin experience is now available for less than the price of a candy bar.

Ain't competition grand?

However, Kleiman also points out the more encouraging fact that heroin is often "price insensitive": "The good news is that the collapse from $2.50 to 50 cents seems to have had only a fairly modest impact on the number of new heroin users; that, like the price collapse itself, is not what I would have predicted based on simple microeconomics."

In a footnote, Kleiman advances his most interesting thesis: "Heroin, even more than cocaine, illustrates the near-futility of trying to use drug law enforcement to control drug abuse once a drug has found a mass market," to which Kleiman adds the supporting fact that increased convictions have had little effect on abuse. The Economist blogger, picking up a similar theme, suggests that "America could legalise drugs and reap the benefits of lower imprisonment and less drug-associated crime, without seeing much of an increase in drug use." An old saw of the legalization movement, but perhaps new facts make it due for a revival.

Posted by Evan Hughes at 03:48 PM

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