Arrest Avoidance: Law Enforcement and the Price of Cocaine

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...

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Bibliographic Details
Published in:The Journal of law & economics 2009-02, Vol.52 (1), p.19-40
Main Author: Freeborn, Beth A.
Format: Article
Language:English
Subjects:
Arrest
Arrest rates
Arrests
Cocaine
Consumer prices
Consumer research
Consumers
Correlation analysis
Criminal arrests
Criminal offenses
Criminal probation
Criminal sentencing
Drug trafficking
Drugs
Economic theory
Empirical research
Fixed costs
Law
Law enforcement
Market prices
Prices
Pricing
Studies
U.S.A
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Summary: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.
ISSN:0022-2186
1537-5285
DOI:10.1086/592719