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Modelling drug market supply disruptions: Where do all the drugs not go?

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  • Caulkins, Jonathan P.
  • Hao, Haijing
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    Abstract

    Drug producing regions often supply several geographically distinct drug consumption markets. Disruptions of opium cultivation in Afghanistan and cocaine production in Colombia show that consumption reductions can be much smaller in some final markets than are reductions in cultivation. This paper derives a model for predicting how production deficits will be "allocated" across downstream markets in the form of reduced use. Plausible parameterization suggests that for cocaine, markets outside the US may serve as a sort of "shock absorber", partially shielding US markets from sharp fluctuations in consumption. One implication is that multi-lateral efforts may be appropriate for source country control.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Policy Modeling.

    Volume (Year): 30 (2008)
    Issue (Month): 2 ()
    Pages: 251-270

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    Handle: RePEc:eee:jpolmo:v:30:y:2008:i:2:p:251-270

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    Web page: http://www.elsevier.com/locate/inca/505735

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    1. Jonathan P. Caulkins, 1997. "Modeling the Domestic Distribution Network for Illicit Drugs," Management Science, INFORMS, vol. 43(10), pages 1364-1371, October.
    2. Dhaval Dave, 2004. "The Effects of Cocaine and Heroin Prices on Drug-Related Emergency Department Visits," NBER Working Papers 10619, National Bureau of Economic Research, Inc.
    3. Dhaval Dave, 2004. "Illicit Drug Use Among Arrestees and Drug Prices," NBER Working Papers 10648, National Bureau of Economic Research, Inc.
    4. Jeff DeSimone & Matthew C. Farrelly, . "Price and Enforcement Effects on Cocaine and Marijuana Demand," Working Papers 0101, East Carolina University, Department of Economics.
    5. Jeffrey DeSimone, 1999. "The Relationship Between Marijuana Prices at Different Market Levels," Working Papers 9915, East Carolina University, Department of Economics.
    6. Jeff Desimone, 2006. "The Relationship Between Illegal Drug Prices At The Retail User And Seller Levels," Contemporary Economic Policy, Western Economic Association International, vol. 24(1), pages 64-73, 01.
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