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THE RELATIONSHIP BETWEEN ILLEGAL DRUG PRICES AT THE RETAIL USER AND SELLER LEVELS

Publication ,  Journal Article
DESIMONE, J
Published in: Contemporary Economic Policy
January 2006
Published version (DOI) Publisher Link

This article uses 1985–2000 DEA data on marijuana and cocaine prices in various metropolitan areas to empirically test two contrasting theories of the relationship between illegal drug prices at the retail seller and user levels. Regression results overwhelmingly reject a multiplicative model in which the ratio of prices at the two levels is constant, but strongly support an additive model in which the difference between these prices is constant. This finding reduces the attractiveness of policies aimed at raising wholesale prices, because retail price responses, and thus potential drug demand deterrence, would be substantially smaller than commonly assumed. (JEL , , )

Duke Scholars

Jeffrey DeSimone
Author Jeffrey DeSimone Economics

Published In

Contemporary Economic Policy

DOI

10.1093/cep/byj004

EISSN

1465-7287

ISSN

1074-3529

Publication Date

January 2006

Volume

24

Issue

1

Start / End Page

64 / 73

Publisher

Wiley

Related Subject Headings

  • Economics
  • 3801 Applied economics
  • 1605 Policy and Administration
  • 1402 Applied Economics
 

Citation

APA
Chicago
ICMJE
MLA
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DESIMONE, J. (2006). THE RELATIONSHIP BETWEEN ILLEGAL DRUG PRICES AT THE RETAIL USER AND SELLER LEVELS. Contemporary Economic Policy, 24(1), 64–73. https://doi.org/10.1093/cep/byj004
DESIMONE, J. E. F. F. “THE RELATIONSHIP BETWEEN ILLEGAL DRUG PRICES AT THE RETAIL USER AND SELLER LEVELS.” Contemporary Economic Policy 24, no. 1 (January 2006): 64–73. https://doi.org/10.1093/cep/byj004.
DESIMONE J. THE RELATIONSHIP BETWEEN ILLEGAL DRUG PRICES AT THE RETAIL USER AND SELLER LEVELS. Contemporary Economic Policy. 2006 Jan;24(1):64–73.
DESIMONE, J. E. F. F. “THE RELATIONSHIP BETWEEN ILLEGAL DRUG PRICES AT THE RETAIL USER AND SELLER LEVELS.” Contemporary Economic Policy, vol. 24, no. 1, Wiley, Jan. 2006, pp. 64–73. Crossref, doi:10.1093/cep/byj004.
DESIMONE J. THE RELATIONSHIP BETWEEN ILLEGAL DRUG PRICES AT THE RETAIL USER AND SELLER LEVELS. Contemporary Economic Policy. Wiley; 2006 Jan;24(1):64–73.
Journal cover image

Published In

Contemporary Economic Policy

DOI

10.1093/cep/byj004

EISSN

1465-7287

ISSN

1074-3529

Publication Date

January 2006

Volume

24

Issue

1

Start / End Page

64 / 73

Publisher

Wiley

Related Subject Headings

  • Economics
  • 3801 Applied economics
  • 1605 Policy and Administration
  • 1402 Applied Economics