An Economic Analysis of the Illicit Drug Market

Abstract

Analyses of heroin addiction have often focused on its relationship to crime. It is assumed that with an increase in price, the addict who has a dependence must commit crime to support his habit. The present analysis proposes a new and critical approach to the problem based on Consumer Behavior Analysis. It identifies the variables of complements and substitutes, and their effects upon price, supply and demand, criminality, and possible implementation of treatment modalities.