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Reassessing a cocaine shock: a contrary narrative from Rabo de Peixe

Author

Listed:
  • Abbate Nicolás
  • Cabral Juan Andrés

Abstract

This work seeks to analyze the effects of an exogenous increase shock in the supply of cocaine using São Miguel Island, Portugal as a case study. Located in the Azores archipelago, the island is politically organized as an autonomous region. In January 2001, half a ton of cocaine unexpectedly washed ashore on Rabo de Peixe, São Miguel, leading to media reports of various alterations on the island, such as a surge in drug dealers and a significant reduction in the drug's price. These events even formed the basis for a documentary and a Netflix series. However, my comprehensive analysis utilizing a Synthetic Control approach paints a contrasting picture. I aimed to examine the short and medium-term repercussions of the increased accessibility of cocaine on São Miguel's crime rates, unemployment, and deaths. Contrary to the narrative constructed by the media and popular culture, I found no significant effects on these outcomes. This study challenges existing media narratives and provides a robust, data-driven insight into the actual impact of this incident on São Miguel.

Suggested Citation

  • Abbate Nicolás & Cabral Juan Andrés, 2023. "Reassessing a cocaine shock: a contrary narrative from Rabo de Peixe," Asociación Argentina de Economía Política: Working Papers 4628, Asociación Argentina de Economía Política.
    • Handle: RePEc:aep:anales:4628
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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