Price and Purity Analysis for Illicit Drug: Data and Conceptual Issues

Data on illicit drug purity and prices are invaluable but problematic. Purists argue they are unsuitable for economic analysis (Manski et al., 2001; Horowitz, 2001), but in reality they are used frequently (ONDCP 2001a, 2001b, 2004; Grossman, 2004). This paper reviews data and conceptual issues that people producing, analyzing, and consuming drug price and purity series should understand in order to reduce the likelihood of misinterpretation. It also identifies aspects of drug markets that are both poorly understood and relevant to some of these issues. They constitute a useful research agenda for health and law enforcement communities who would benefit from better data on the supply, availability, and use of illicit drugs.