Price and purity analysis for illicit drug: Data and conceptual issues

Data on illicit drug purity and prices are invaluable but challenging. Academic purists argue they are unsuitable for economic analysis [Manski, C.F., Pepper, J.V., Petrie, C.V., 2001. Informing America's Policy on Illegal Drugs: What We Don’t Know Keeps Hurting Us. National Academy Press, Washington, DC], but in practice they are used frequently [ONDCP, 2001a. What America's Users Spend on Illegal Drugs. Office of National Drug Control Policy, The White House, Washington, DC; ONDCP, 2001b. The Price of Illicit Drugs: 1981 Through the Second Quarter of 2000. Office of National Drug Control Policy, The White House, Washington, DC; ONDCP, 2004. The Price and Purity of Illicit Drugs: 1981 Through the Second Quarter of 2003. Office of National Drug Control Policy, The White House, Washington, DC; Grossman, M., 2004. Individual behaviors and substance use: the role of price. Plenary Address for the 24th Arne Ryde Symposium on Economics of Substance Abuse at Lund University, Lund, Sweden, August 13–14, 2004]. This paper reviews data and conceptual issues that people producing, analyzing, and consuming drug price and purity series should understand in order to reduce the likelihood of misinterpretation. It also identifies aspects of drug markets that are both poorly understood and relevant to some of these issues. They constitute a useful research agenda for health and law enforcement communities who would benefit from better data on the supply, availability, and use of illicit drugs.