IDEAS home Printed from https://ideas.repec.org/a/oup/ecinqu/v39y2001i4p627-43.html
   My bibliography  Save this article

The Effect of Cocaine Prices on Crime

Author

Listed:
  • Desimone, Jeff

Abstract

The relationship between cocaine prices and crime has critical implications for U.S. drug policy, but is theoretically indeterminate because cocaine price changes affect crime through changes in both cocaine consumption and expenditures. This paper investigates this relationship in annual data from 1981-95 on 29 large U.S. cities, accounting for simultaneity by using two-stage least squares with measures of wholesale supply factors and retail enforcement intensity as instruments for cocaine prices. Controlling for prices of other drugs, deterrence, socioeconomic factors, and city and year-specific effects, a strong negative relationship exists between cocaine prices and six of seven FBI index crimes. Copyright 2001 by Oxford University Press.

Suggested Citation

  • Desimone, Jeff, 2001. "The Effect of Cocaine Prices on Crime," Economic Inquiry, Western Economic Association International, vol. 39(4), pages 627-643, October.
  • Handle: RePEc:oup:ecinqu:v:39:y:2001:i:4:p:627-43
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. White, Michael D & Luksetich, William A, 1983. "Heroin: Price Elasticity and Enforcement Strategies," Economic Inquiry, Western Economic Association International, vol. 21(4), pages 557-564, October.
    2. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    3. Saffer, Henry & Chaloupka, Frank, 1999. "The Demand for Illicit Drugs," Economic Inquiry, Western Economic Association International, vol. 37(3), pages 401-411, July.
    4. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    5. Frank J. Chaloupka & Michael Grossman & John A. Tauras, 1999. "The Demand for Cocaine and Marijuana by Youth," NBER Chapters, in: The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research, pages 133-156, National Bureau of Economic Research, Inc.
    6. Miron, Jeffrey A., 1992. "Economists and drug policy : A comment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 36(1), pages 249-259, July.
    7. Grossman, Michael & Chaloupka, Frank J., 1998. "The demand for cocaine by young adults: a rational addiction approach," Journal of Health Economics, Elsevier, vol. 17(4), pages 427-474, August.
    8. Jeffrey DeSimone, 1999. "Illegal Drug Use and Labor Supply," Working Papers 9906, East Carolina University, Department of Economics.
    9. Jeff Grogger & Mike Willis, 1998. "The Introduction of Crack Cocaine and the Rise in Urban Crime Rates," NBER Working Papers 6353, National Bureau of Economic Research, Inc.
    10. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    11. Levitt, Steven D, 1997. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime," American Economic Review, American Economic Association, vol. 87(3), pages 270-290, June.
    12. Silverman, Lester P. & Spruill, Nancy L., 1977. "Urban crime and the price of heroin," Journal of Urban Economics, Elsevier, vol. 4(1), pages 80-103, January.
    13. Mark Thornton, 1994. "The economics of prohibition," Chapters, in: Peter J. Boettke (ed.), The Elgar Companion to Austrian Economics, chapter 51, Edward Elgar Publishing.
    14. Niskanen, William A., 1992. "Economists and drug policy," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 36(1), pages 223-248, July.
    15. Mast, Brent D & Benson, Bruce L & Rasmussen, David W, 2000. "Entrepreneurial Police and Drug Enforcement Policy," Public Choice, Springer, vol. 104(3-4), pages 285-308, September.
    16. Lott, John R, Jr & Mustard, David B, 1997. "Crime, Deterrence, and Right-to-Carry Concealed Handguns," The Journal of Legal Studies, University of Chicago Press, vol. 26(1), pages 1-68, January.
    17. Bruce L. Benson & David W. Rasmussen, 1991. "Relationship Between Illicit Drug Enforcement Policy And Property Crimes," Contemporary Economic Policy, Western Economic Association International, vol. 9(4), pages 106-115, October.
    18. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-565, May-June.
    19. Caulkins Jonathan P., 1995. "Domestic Geographic Variation in Illicit Drug Prices," Journal of Urban Economics, Elsevier, vol. 37(1), pages 38-56, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Beth A. Freeborn, 2009. "Arrest Avoidance: Law Enforcement and the Price of Cocaine," Journal of Law and Economics, University of Chicago Press, vol. 52(1), pages 19-40, February.
    2. Barrie M. Craven & Michael L. Marlow & Alden F. Shiers, 2013. "The Economics of Minimum Pricing for Alcohol," Economic Affairs, Wiley Blackwell, vol. 33(2), pages 174-189, June.
    3. Sara Markowitz & Erik Nesson & Eileen Poe-Yamagata & Curtis Florence & Tracy Roberts & Sarah Beth Link, 2012. "Estimating the Relationship between Alcohol Policies and Youth Violence," Working Papers 201205, Ball State University, Department of Economics, revised Jun 2012.
    4. Jeff DeSimone & Matthew C. Farrelly, 2003. "Price and Enforcement Effects on Cocaine and Marijuana Demand," Economic Inquiry, Western Economic Association International, vol. 41(1), pages 98-115, January.
    5. Kuziemko, Ilyana & Levitt, Steven D., 2004. "An empirical analysis of imprisoning drug offenders," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2043-2066, August.
    6. Sara Markowitz, 2000. "An Economic Analysis of Alcohol, Drugs, and Violent Crime in the National Crime Victimization Survey," NBER Working Papers 7982, National Bureau of Economic Research, Inc.
    7. Christopher Carpenter & Carlos Dobkin, 2010. "Alcohol Regulation and Crime," NBER Chapters, in: Controlling Crime: Strategies and Tradeoffs, pages 291-329, National Bureau of Economic Research, Inc.
    8. Markowitz, Sara, 2005. "Alcohol, Drugs and Violent Crime," International Review of Law and Economics, Elsevier, vol. 25(1), pages 20-44, March.
    9. Hope Corman & Naci Mocan, 2015. "Alcohol Consumption, Deterrence and Crime in New York City," Journal of Labor Research, Springer, vol. 36(2), pages 103-128, June.
    10. Cook, Philip J. & Durrance, Christine Piette, 2013. "The virtuous tax: Lifesaving and crime-prevention effects of the 1991 federal alcohol-tax increase," Journal of Health Economics, Elsevier, vol. 32(1), pages 261-267.
    11. Mireia Jofre-Bonet & Jody L. Sindelar, 2002. "Drug Treatment as a Crime Fighting Tool," NBER Working Papers 9038, National Bureau of Economic Research, Inc.
    12. repec:oup:apecpp:v:40:y:2018:i:3:p:461-481. is not listed on IDEAS
    13. Rosalie Liccardo Pacula & Beau Kilmer, 2003. "Marijuana and Crime: Is there a Connection Beyond Prohibition?," NBER Working Papers 10046, National Bureau of Economic Research, Inc.
    14. Sara Markowitz & Erik Nesson & Eileen Poe-Yamagata & Curtis Florence & Partha Deb & Tracy Andrews & Sarah Beth L. Barnett, 2012. "Estimating the Relationship between Alcohol Policies and Criminal Violence and Victimization," German Economic Review, Verein für Socialpolitik, vol. 13(4), pages 416-435, November.
    15. Iljoong Kim & Jaewook Byeon, 2017. "Discretionary prosecution of regulatory crimes: disproportionate emphasis and consequences to other serious crimes," Asia-Pacific Journal of Regional Science, Springer, vol. 1(2), pages 559-587, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bruce L. Benson, 2010. "The Allocation of Police," Chapters, in: Bruce L. Benson & Paul R. Zimmerman (ed.), Handbook on the Economics of Crime, chapter 8, Edward Elgar Publishing.
    2. Hope Corman & H. Naci Mocan, 1996. "A Time-Series Analysis of Crime and Drug Use in New York City," NBER Working Papers 5463, National Bureau of Economic Research, Inc.
    3. Naci Mocan & Kaj Gittings, 2010. "The Impact of Incentives on Human Behavior: Can We Make it Disappear? The Case of the Death Penalty," NBER Chapters, in: The Economics of Crime: Lessons for and from Latin America, pages 379-418, National Bureau of Economic Research, Inc.
    4. Dave, Dhaval, 2006. "The effects of cocaine and heroin price on drug-related emergency department visits," Journal of Health Economics, Elsevier, vol. 25(2), pages 311-333, March.
    5. Liu, Jin-Long & Liu, Jin-Tan & Hammitt, James K. & Chou, Shin-Yi, 1999. "The price elasticity of opium in Taiwan, 1914-1942," Journal of Health Economics, Elsevier, vol. 18(6), pages 795-810, December.
    6. Yunker, James A., 2012. "Estimated optimal drug law enforcement expenditures based on U.S. annual data," Journal of Policy Modeling, Elsevier, vol. 34(3), pages 356-371.
    7. Horst Entorf & Peter Winker, 2001. "The Economics of Crime: Investigating the Drugs-Crime Channel," Law and Economics 0108001, University Library of Munich, Germany.
    8. Jeffrey DeSimone, 1999. "Illegal Drug Use and Labor Supply," Working Papers 9906, East Carolina University, Department of Economics.
    9. Jaewook Byeon & Iljoong Kim & Dongwon Lee, 2018. "Protest and property crime: political use of police resources and the deterrence of crime," Public Choice, Springer, vol. 175(1), pages 181-196, April.
    10. Jofre-Bonet, Mireia & Petry, Nancy M., 2008. "Trading apples for oranges?: Results of an experiment on the effects of Heroin and Cocaine price changes on addicts' polydrug use," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 281-311, May.
    11. Craig A. Gallet, 2014. "Can Price Get The Monkey Off Our Back? A Meta‐Analysis Of Illicit Drug Demand," Health Economics, John Wiley & Sons, Ltd., vol. 23(1), pages 55-68, January.
    12. Rosalie Liccardo Pacula & Michael Grossman & Frank J. Chaloupka & Patrick M. O'Malley & Lloyd D. Johnston & Matthew C. Farrelly, 2001. "Marijuana and Youth," NBER Chapters, in: Risky Behavior among Youths: An Economic Analysis, pages 271-326, National Bureau of Economic Research, Inc.
      • R. L. Pacula & M. Grossman & F. J. Chaloupka & P. M. O'Malley & L. Johnston & M. C. Farrelly, 2000. "Marijuana and Youth," NBER Working Papers 7703, National Bureau of Economic Research, Inc.
    13. H. Naci Mocan & Hope Corman, 2000. "A Time-Series Analysis of Crime, Deterrence, and Drug Abuse in New York City," American Economic Review, American Economic Association, vol. 90(3), pages 584-604, June.
    14. Yu Liu & Thomas M. Fullerton Jr. & Nathan J. Ashby, 2013. "Assessing The Impacts Of Labor Market And Deterrence Variables On Crime Rates In Mexico," Contemporary Economic Policy, Western Economic Association International, vol. 31(4), pages 669-690, October.
    15. Dhaval Dave, 2004. "Illicit Drug Use Among Arrestees and Drug Prices," NBER Working Papers 10648, National Bureau of Economic Research, Inc.
    16. Steven N. Durlauf & Daniel S. Nagin, 2010. "The Deterrent Effect of Imprisonment," NBER Chapters, in: Controlling Crime: Strategies and Tradeoffs, pages 43-94, National Bureau of Economic Research, Inc.
    17. Isaac Ehrlich, 2010. "The Market Model of Crime: A Short Review and New Directions," Chapters, in: Bruce L. Benson & Paul R. Zimmerman (ed.), Handbook on the Economics of Crime, chapter 1, Edward Elgar Publishing.
    18. Zimmerman, Paul R. & Benson, Bruce L., 2007. "Alcohol and rape: An "economics-of-crime" perspective," International Review of Law and Economics, Elsevier, vol. 27(4), pages 442-473, December.
    19. Jeff DeSimone, 2002. "Determinants of Drug Injection Behavior: Economic Factors, HIV Injection Risk and Needle Exchange Programs," NBER Working Papers 9350, National Bureau of Economic Research, Inc.
    20. Kuziemko, Ilyana & Levitt, Steven D., 2004. "An empirical analysis of imprisoning drug offenders," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2043-2066, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ecinqu:v:39:y:2001:i:4:p:627-43. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.