AN ESTIMATE OF FUNDS DERIVED FROM STOLEN MERCHANDISE RESOLD FOR HEROIN CAN BE OBTAINED BY MULTIPLYING THE NUMBER OF ESTIMATED HEROIN ADDICTS (N) BY THE AVERAGE DAILY COST OF THE HABIT (Z), THE PERCENTAGE OF THE YEAR IN ACTIVE USE OF HEROIN (A), THE PROPORTION OF HEROIN PURCHASED WITH CASH (P), AND THE PROPORTION OF HEROIN PURCHASED WITH CASH OBTAINED THROUGH MERCHANDISE THEFT (T), (I.E., N X Z X A X P X T = VALUE OF HEROIN PURCHASES FINANCED BY STOLEN MERCHANDISE PER DAY). THESE FIGURES MAY BE OBTAINED FROM ESTIMATES BASED ON ARREST RECORDS AND OVERDOSE DEATHS, INTERVIEWS WITH ADDICTS, AND FIGURES FROM PREVIOUS RESEARCH. THE APPLICATION OF THIS FORMULA TO ADDICTS IN OAKLAND, CALIFORNIA, INDICATED THAT THE VALUE OF THEFT-FINANCED HEROIN PURCHASES PER DAY EQUALS APPROXIMATELY $40,425. CONTRARY TO GENERAL ASSUMPTIONS, HEROIN ADDICTS DEAL LARGELY WITH LEGITIMATE BUSINESSES, PARTICULARLY PAWNBROKERS. ONLY 2 OF 51 OAKLAND ADDICTS INTERVIEWED INDICATED THAT THEY WOULD SELL STOLEN PROPERTY TO A FENCE. ON THE BASIS OF INTERVIEW DATA, A LISTING OF 19 LOCAL STORES AND PAWNSHOPS DEALING ALMOST EXCLUSIVELY WITH ADDICTS WAS COMPILED. SALES WERE MADE AT THESE BUSINESSES TO EXAMINE THE PRICE MARKUPS ON GOODS. IN GENERAL, THE MARKUP ON AN ITEM IS DIRECTLY RELATED TO THE WHOLESALE TO RETAIL MARGIN FOR THE ITEM IF NEW. ON THE AVERAGE, ADDICTS RECEIVE 15 PERCENT OF THE NEW PRICE OF THE ITEM, AND MIDDLEMEN CHARGE THEIR CUSTOMERS 3 TIMES THIS FIGURE, ALTHOUGH SECONDHAND STORES TEND TO PAY SLIGHTLY BETTER PRICES TO ADDICTS THAN DO PAWNBROKERS. THIS MEANS THAT THE MIDDLEMEN RECEIVES APPROXIMATELY $2.00 FOR EVERY $1.00 PAID TO THE ADDICT. IN GENERAL, MIDDLEMEN WERE CARELESS ABOUT ASKING FOR AND RECORDING SELLER IDENTIFICATION INFORMATION EXCEPT WHERE VALUABLE MERCHANDISE WAS INVOLVED. FURTHER, ONLY EXTREMELY VALUABLE STOLEN ITEMS ARE LISTED BY POLICE AND CIRCULATED. IT IS SUGGESTED THAT IF A COMPUTERIZED SCREENING SYSTEM FOR STOLEN GOODS WERE MANDATORY FOR ALL PAWNBROKERS AND SECONDHAND DEALERS, THIS COUPLED WITH IDENTIFICATION OPERATIONS COULD EFFECTIVELY REDUCE THE WAGE THAT THE ADDICT RECEIVES FOR STOLEN GOODS. FURTHER, INTERVIEWS WITH ADDICTS SUGGEST THAT THEY SPEND THE MAXIMUM AVAILABLE TIME STEALING; CONSEQUENTLY, DESPITE THE WAGE DECREASE, CRIMINAL ACTIVITY WOULD NOT INCREASE. BASED ON KNOWN BEHAVIOR PATTERNS AND CHARACTERISTICS OF HEROIN ADDICTS, IT IS LIKELY THAT THEIR THEFT AND DRUG CONSUMPTION WOULD EVENTUALLY ALSO DECREASE. NOTES AND REFERENCES ARE PROVIDED. GRAPHIC AND TABULAR DATA ARE INCLUDED. (JAP)