Thi s paper present s a revi ew of t he recent econom i cs l i t erat ure i n t he area of i l l i ci t drug use.Part i cul ar at t ent i on i s pai d t o t he econom i cs of addi ct i on and t he rat i onal addi ct i on m odel , t he w el fare econom i cs fram ew ork for anal ysi ng t he soci al cost s of drug use, and t he at t em pt s t hat have been m ade by econom i st s t o eval uat e recent or proposed pol i cy i nt ervent i ons. A dom i nant t hem e i n t hi s revi ew i s t he probl em of poor dat a avai l abi l i t y. Thi s i s part i cul arl y t rue w hen i t com es t o i m pl em ent i ng t he Rat i onal A ddi ct i on m odel , but i t i s al so apparent i n t he l i t erat ure on est i m at i ng t he cost s of i l l i ci t drug use t o soci et y as a w hol e. O ne of t he m ai n concl usi ons of t hi s revi ew i s t hat unt i l recent l y publ i c pol i cy has not been part i cul arl y i nfl uenced by research carri ed out by econom i st s. It i s not cl ear w het her t hi s i s because econom i st s have had t o grappl e w i t h i nadequat e dat a, and hence t hei r concl usi ons are couched i n uncert ai nt y, or w het her i t i s because drugs researchers have assum ed a very l i m i t ed rol e for econom i st s i n t hei r anal ysi s.