The article presents a cost-benefit analysis of drug legalization. Drug legalization proposals run from the gamut from creating an open market of freely available drugs to regulating conditions on the sale and promotion of drugs, with restrictions on age, place, time, and conditions of use. Costs and benefits vary widely according to characteristics of the specific scenario, as well as the drug under consideration. The author argues that policy makers could identify and structure the major consequences of drug use and identify those amenable to monetary valuation. The actual cost-benefit analysis would involve collecting data, deriving ranges of reasonable estimates of parameter values, and assessing the relevant costs and benefits. Price elasticity estimates would be used to evaluate variables such as the consumption impact of legalization and the crime costs of the price differential between regimes of legal and illegal drugs. 37 references