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Economics of Heroin (From Dealing With Drug Abuse, Patricia M. Wald, Peter Barton Hutt, eds., 1972, P 255-299)

NCJ Number
162187
Author(s)
J F Holahan; P A Henningsen
Date Published
1972
Length
45 pages
Annotation
This paper applies economic analysis to the heroin market and to the effect of alternative government policies on this market.
Abstract
The principal concern is supply, but some discussion of demand is included because the effects of public policy on the supply of drugs cannot be adequately analyzed without some knowledge of the effect on demand of changes in price, risk, and availability. Topics studied include: (1) Production (Sources of Supply; Yields, Market Prices, and Incomes); (2) Policy Options (Preemptive Buying; Direct Controls); (3) Distribution (Market Structure; Costs and Profits; Effects of Police Pressure); and (4) Consumption (Daily Expenditures for Heroin; Sources of Funds for Heroin Purchases). This examination shows that public policies dealing with the production of opium and the domestic distribution of heroin will never be completely successful in eliminating heroin use in the United States. More effort and resources must be spent to curb the demand for heroin. In choosing between policy alternatives, cash benefit analyses can show that the probable reduction in the social costs of addiction to be derived from one policy will exceed the reduction to be derived from another. Such choices must be illuminated by full-scale studies of this nature. Tables, notes