Can Price Get the Monkey Off Our Back? A Meta‐analysis of Illicit Drug Demand

Gallet, Craig A.

doi:10.1002/hec.2902

Cited by 69 publications

(60 citation statements)

References 62 publications

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“…In other words, the available evidence suggests that a 10% increase in the price of heroin or cocaine would reduce consumption by between 5 and 6%, while a 10% increase in the price of cannabis would reduce consumption by between 2 and 3%. These effects are comparable to those found for alcohol and tobacco (Gallet, 2013).…”

Section: Monetary Costssupporting

confidence: 90%

The pros and cons of prohibiting drugs

Weatherburn

2014

Australian & New Zealand Journal of Criminology

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In September 2012, a group known as Australia 21 called for a rethink on the prohibition against illegal drugs. If the response from Australian Federal, State, and Territory Governments is any guide, the call fell on deaf ears. In recent years, even scholarly debate about the merits of prohibition appears to have subsided. This paper acknowledges that social and financial costs of the prohibition against illegal drugs but argues that prohibition also prevents a great deal of harm. The multifarious nature of drug-related harm and the differences between people in the weight assigned to various harms makes it impossible say what policy best minimizes drug-related harm.

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Section: Monetary Costssupporting

confidence: 90%

The pros and cons of prohibiting drugs

Weatherburn

2014

Australian & New Zealand Journal of Criminology

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“…See Gallet (2014) for an excellent review of 42 studies that collectively provide 462 elasticity estimates for heroin, cocaine, and marijuana.…”

Section: Prior Studies Of Heroin Price Elasticitiesmentioning

confidence: 99%

The price elasticity of demand for heroin: Matched longitudinal and experimental evidence

Olmstead

Alessi

Kline

et al. 2015

Journal of Health Economics

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This paper reports estimates of the price elasticity of demand for heroin based on a newly constructed dataset. The dataset has two matched components concerning the same sample of regular heroin users: longitudinal information about real-world heroin demand (actual price and actual quantity at daily intervals for each heroin user in the sample) and experimental information about laboratory heroin demand (elicited by presenting the same heroin users with scenarios in a laboratory setting). Two empirical strategies are used to estimate the price elasticity of demand for heroin. The first strategy exploits the idiosyncratic variation in the price experienced by a heroin user over time that occurs in markets for illegal drugs. The second strategy exploits the experimentally-induced variation in price experienced by a heroin user across experimental scenarios. Both empirical strategies result in the estimate that the conditional price elasticity of demand for heroin is approximately −0.80.

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“…Ongoing denormalisation of tobacco smoking and changing economic conditions could influence the future elasticity of demand in response to price changes. It can be noted that price elasticities for much more expensive drugs, such as marijuana (−0.15 to −0.31), cocaine (−0.53 to −0.56) and heroin (−0.47 to −0.54),28 are not dissimilar. However, price elasticities would also most certainly change with increasing availability of nicotine substitutes such as e-cigarettes, with removal of cigarette additives such as sugars and menthol or with a phase-down in the nicotine content of cigarettes.…”

Section: Discussionmentioning

confidence: 99%