The Effect of Drug Prohibition on Drug Prices: Evidence from the Markets for Cocaine and Heroin
45 Pages Posted: 16 May 2003 Last revised: 1 Nov 2010
Date Written: May 2003
This paper examines the effect of drug prohibition on the black market prices of cocaine and heroin. The paper examines the ratio of retail to farmgate price for cocaine, heroin, and several legal goods, and it compares legal versus black market prices for cocaine and heroin. The results suggest that cocaine and heroin are substantially more expensive than they would be in a legalized market, but to a lesser degree than suggested in previous research.
Suggested Citation: Suggested Citation