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What Is the Average Price of an Illicit Drug?

NCJ Number
152437
Author(s)
J P Caulkins
Date Published
1994
Length
5 pages
Annotation
This article suggests how the average price of an illicit drug should be calculated, since estimates of the total dollar value of the markets for illicit drugs are valuable for policymaking.
Abstract
The total dollar value of the markets for illicit drugs is usually produced by multiplying estimated consumption by price; however, quantity discounts in the prices for illicit drugs make the average price paid a function of the distribution of retail purchase sizes. Estimates of total spending on an illicit drug should take this into account. Rough calculations for the United States suggest that failing to consider the purchase size distribution can affect spending estimates by one-third or more. The magnitude of the effect may vary from country to country, but it should be present wherever there are both quantity discounts and a variety of retail purchase sizes. The formula for computing average price is elementary. The principal challenge is to determine the distribution of retail purchase sizes. This suggests that data should be collected on users' purchasing habits. The recommended calculation technique is illustrated with calculations for the price for heroin and cocaine. 2 tables and 10 references

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