Pubdate: Fri, 3 Jul 2009
Source: New Scientist (UK)
Copyright: New Scientist, RBI Limited 2009
Author: Jim Giles


TOUGH policing of the illegal drugs market may have the perverse 
effect of making drugs more affordable and thereby encouraging people 
to use them, according to a new model of the dynamics of this market.

Its creators, a team of economists led by Manolis Galenianos of 
Pennsylvania State University in University Park, stop short of 
calling for police to soften their approach because this would also 
have adverse consequences. But for law enforcers whose aim is to 
discourage drug use, the findings hint that tough policing alone may 
not be the most effective way to tackle the problem.

The model is based on the interactions of a hypothetical population 
of buyers and sellers. Unlike other models of the market in illicit 
drugs, it takes into account two factors that are crucial to the way 
sellers and buyers act that tend not to be present in conventional markets.

One concerns the way consumers judge quality. In the market for 
electronic goods, say, consumers generally have access to reliable 
information about the quality of the product. In contrast, heroin 
users often have no way of gauging the quality of a purchase before 
they use it.

The second concerns what is known as "search cost". While buyers of 
TVs can easily switch shops if they don't like a seller, drug users 
face an increased risk of arrest every time they search out a new 
dealer. So in Galenianos's model, buyers make purchasing decisions 
without considering whether they could get higher-quality drugs at a 
lower price from somewhere other than their usual supplier.

The model produces results that resemble some of what is seen in real 
drug markets, suggesting that it provides a useful reflection of the 
real world. It also throws up fresh ways in which dealers and addicts 
may relate to each other, and some unexpected ways in which these 
ties can impact the price of drugs.

In one example, the model is used to simulate what happens when the 
number of police is increased. The researchers assume this would make 
it even more difficult than usual for buyers to find a new seller.

When they add this effect into the model, some dealers respond by 
lowering the quality of the drugs they sell; they can get away with 
this because their customers become especially reluctant to look 
elsewhere. But more dealers react by working harder to build a good 
relationship with customers, because finding new ones has become 
harder than before. They do this by raising the purity of their 
drugs, making it cheaper for users to get the same hit.

Buyers Became Unwilling to Switch Supplier, So Sellers Lure Them in 
by Offering Purer Drugs

The team, which has submitted its results for publication, concludes 
that rigorous policing may encourage drug use, and suggests that 
discouraging dealers from selling stronger drugs may be a better way 
of restricting drug use.

One strategy for achieving this might be to hand out longer sentences 
for selling stronger drugs - though team member Rosalie Liccardo 
Pacula, an economist at the RAND Corporation in Santa Monica, 
California, points out that care would need to be taken in following 
this route. Weaker drugs can be more dangerous than pure ones if the 
substance used to dilute them is toxic. Before the model can drive 
policy it needs to incorporate more details, such as differences in 
behaviour of individual buyers, Pacula says.

Will politicians take notice of such a model? Will Brownsberger, a 
drug policy specialist who sits as a Democrat in the Massachusetts 
House of Representatives, is sceptical. Even if more detail is added, 
economists will struggle to get the attention of drug policy-makers, he says.
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