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The War On Drugs 2.0: Darknet Fentanyl'S Rise And The Effects Of Regulatory And Law Enforcement Action

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  • Jacob N. Miller

Abstract

U.S. overdose deaths attributed to synthetic opioids, such as fentanyl, have increased from under 3,000 in 2013 to nearly 20,000 in 2016, making up half of all opioid‐related overdose deaths. Using web scrapes of darknet markets from 2014 to 2016, I provide historical prices for fentanyl and its most popular analogues and find that fentanyl vendors priced fentanyl in 2014 at a 90% discount compared to an equivalent dose of heroin. Using regression discontinuity, I evaluate the effects of two major law enforcement and regulatory events. I find minimal lasting effects of U.S. legal actions intended to disrupt darknet markets, but there are statistically significant indications of a price increase corresponding with regulatory action in China. Despite these indications of some regulatory success, fentanyl prices remained approximately 90% cheaper than heroin. (JEL I18, K42)

Suggested Citation

  • Jacob N. Miller, 2020. "The War On Drugs 2.0: Darknet Fentanyl'S Rise And The Effects Of Regulatory And Law Enforcement Action," Contemporary Economic Policy, Western Economic Association International, vol. 38(2), pages 246-257, April.
    • Handle: RePEc:bla:coecpo:v:38:y:2020:i:2:p:246-257
    DOI: 10.1111/coep.12447
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    References listed on IDEAS

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    1. Abby Alpert & David Powell & Rosalie Liccardo Pacula, 2018. "Supply-Side Drug Policy in the Presence of Substitutes: Evidence from the Introduction of Abuse-Deterrent Opioids," American Economic Journal: Economic Policy, American Economic Association, vol. 10(4), pages 1-35, November.
    2. Saffer, Henry & Chaloupka, Frank, 1999. "The Demand for Illicit Drugs," Economic Inquiry, Western Economic Association International, vol. 37(3), pages 401-411, July.
    3. Michael Stepner, 2013. "BINSCATTER: Stata module to generate binned scatterplots," Statistical Software Components S457709, Boston College Department of Economics, revised 24 Nov 2013.
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    Cited by:

    1. Shishir Shakya & Collin Hodges, 2023. "Must‐access prescription drug monitoring programs and retail opioid sales," Contemporary Economic Policy, Western Economic Association International, vol. 41(1), pages 146-165, January.
    2. repec:ags:aaea22:335457 is not listed on IDEAS
    3. Chowdhury, Sulin, 2023. "Prescription Limiting Laws Effects on Opioid Misuse in the United States," 2023 Annual Meeting, July 23-25, Washington D.C. 335457, Agricultural and Applied Economics Association.
    4. Johanna Catherine Maclean & Justine Mallatt & Christopher J. Ruhm & Kosali Simon, 2022. "The Opioid Crisis, Health, Healthcare, and Crime: A Review of Quasi-Experimental Economic Studies," The ANNALS of the American Academy of Political and Social Science, , vol. 703(1), pages 15-49, September.
    5. Mohamed Chawki, 2022. "The Dark Web and the future of illicit drug markets," Journal of Transportation Security, Springer, vol. 15(3), pages 173-191, December.

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    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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