Change search
ReferencesLink to record
Permanent link

Direct link
Drugonomics: Industrial Organization of Illegal Drug Markets
Stockholm University, Faculty of Social Sciences, Department of Economics.
2007 (English)Doctoral thesis, monograph (Other academic)
Abstract [en]

Insurgents, drug lords and anti-drug supply policies in the Andes. The United States has spent enormous resources on supply policies to decrease illegal drug production in the Andes and availability in the U.S. market. However, evidence suggests increased drug production and availability over time. Moreover, insurgent activities in the region have also increased. We present an explanation for these unexpected trends by analyzing an illicit drug market where drug lords and insurgents interact. The analysis suggests that supply policies increase drug production and insurgent activity while having no effect on drug availability and prices.

Counter-intuitive effects of domestic law enforcement policies in the United States. In spite of the increase in domestic law enforcement policies in the U.S., illegal drug distribution activities have followed a non-monotonic trend and cocaine and heroin prices have been dropping or have remained stable over time. This paper provides an explanation for these counter-intuitive effects. We model how drug lords respond to this type of policy and predict distribution activities, prices and drug consumption in the United States.

Spillover effects of domestic law enforcement policies. Independent efforts by local and state governments in the United States to combat illegal drug markets are in contrast with a global market where drugs are sold and distributed simultaneously in different locations. We study the effect that domestic law enforcement policies may have on this global context. The external effects of these policies induce overspending by governments, but a low level of global drug consumption. Competition effects are also studied.

Drive-by competition? Violence in the drug market. Today, the retail distribution of most illegal drugs is mainly in the hands of street gangs that also account for most of the drug related violence in many states and cities in the United States. Interestingly, the level of violence in drug markets appears to vary with the type of drug. Based on the notion that gangs use violence strategically to compete for customers we find that both the effectiveness of violence in shifting demand and the cost of switching supplier by users affect the level of violence in the market. Indirect effects of anti-drug policies are discussed.

Place, publisher, year, edition, pages
Stockholm: Nationalekonomiska institutionen , 2007. , 129 p.
Dissertations in Economics (Stockholm), ISSN 1404-3491 ; 2007:1
Keyword [en]
Illegal behavior, law enforcement, conflict, drugs
National Category
URN: urn:nbn:se:su:diva-1372ISBN: 91-7155-354-1OAI: diva2:189976
Public defence
2007-01-15, hörsal 5, hus B, Universitetsvägen 10, Stockholm, 10:00
Available from: 2006-12-18 Created: 2006-12-18Bibliographically approved

Open Access in DiVA

fulltext(986 kB)1046 downloads
File information
File name FULLTEXT01.pdfFile size 986 kBChecksum MD5
Type fulltextMimetype application/pdf
cover(115 kB)22 downloads
File information
File name COVER01.pdfFile size 115 kBChecksum MD5
Type coverMimetype application/pdf

By organisation
Department of Economics

Search outside of DiVA

GoogleGoogle Scholar
Total: 1046 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 1717 hits
ReferencesLink to record
Permanent link

Direct link