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Arrest Avoidance: Law Enforcement and the Price of Cocaine

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  • Beth A. Freeborn

Abstract

Contrary to one goal of drug law enforcement, cocaine prices decreased between the years 1986 and 2000. This paper discusses how arrest avoidance behavior may affect cocaine consumer and dealer response to law enforcement. Dealers avoid arrest by making quick and easy sales; thus, pure-gram price is negatively related to dealer enforcement. Consumers avoid arrest by accepting high prices rather than searching for lower prices. Thus, pure-gram price is positively related to consumer enforcement. Because the implications from arrest avoidance conflict with traditional models of how enforcement should affect prices, I also empirically examine the relationship. Using purchase-level data from the Drug Enforcement Administration and legal penalty data, I find a negative, significant relationship between dealer enforcement and pure-gram price and a positive, significant relationship between consumer enforcement and pure-gram price. Both are consistent with the intuition of arrest avoidance. (c) 2009 by The University of Chicago. All rights reserved.

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  • 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.
  • Handle: RePEc:ucp:jlawec:v:52:y:2009:i:1:p:19-40
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    File URL: http://dx.doi.org/10.1086/592719
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    References listed on IDEAS

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    1. Yuan, Yuehong & Caulkins, Jonathan P., 1998. "The Effect of Variation in High-level Domestic Drug Enforcement on Variation in Drug Prices," Socio-Economic Planning Sciences, Elsevier, vol. 32(4), pages 265-276, December.
    2. Steven D. Levitt & Sudhir Alladi Venkatesh, 2000. "An Economic Analysis of a Drug-Selling Gang's Finances," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 755-789.
    3. 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.
    4. 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.
    5. 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.
    6. Desimone, Jeff, 2001. "The Effect of Cocaine Prices on Crime," Economic Inquiry, Western Economic Association International, vol. 39(4), pages 627-643, October.
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    Cited by:

    1. Manolis Galenianos & Alessandro Gavazza, 2014. "A quantitative analysis of the retail market for illicit drugs," 2014 Meeting Papers 618, Society for Economic Dynamics.
    2. Robert Lawson & Todd Nesbit, 2013. "Alchian and Allen Revisited: Law Enforcement and the Price of Weed," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(4), pages 363-370, December.
    3. Kyle W. O’Donnell, 2015. "The cultural and political economy of drug prohibition," Chapters,in: Culture and Economic Action, chapter 19, pages 418-435 Edward Elgar Publishing.

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