Friday, July 3, 2009
TOUGH policing of the illegal drugs market may have the perverse effect of making drugs more affordable and thereby encouraging people to use them, according to a new model of the dynamics of this market.
Its creators, a team of economists led by Manolis Galenianos of Pennsylvania State University in University Park, stop short of calling for police to soften their approach because this would also have adverse consequences. But for law enforcers whose aim is to discourage drug use, the findings hint that tough policing alone may not be the most effective way to tackle the problem.
The model is based on the interactions of a hypothetical population of buyers and sellers. Unlike other models of the market in illicit drugs, it takes into account two factors that are crucial to the way sellers and buyers act that tend not to be present in conventional markets.
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One concerns the way consumers judge quality. In the market for electronic goods, say, consumers generally have access to reliable information about the quality of the product. In contrast, heroin users often have no way of gauging the quality of a purchase before they use it.
The second concerns what is known as “search cost”. While buyers of TVs can easily switch shops if they don’t like a seller, drug users face an increased risk of arrest every time they search out a new dealer. So in Galenianos’s model, buyers make purchasing decisions without considering whether they could get higher-quality drugs at a lower price from somewhere other than their usual supplier.
This article was posted: Friday, July 3, 2009 at 7:40 am