Honors Capstone Project
Date of Submission
Professor Christopher Rohlfs
Professor Jeffrey Kubik
Capstone Prize Winner
Won Capstone Funding
Economics | Other Economics | Public Economics
Over the past five decades American drug policy can succinctly be classified by two words: expensive and punitive. American drug policy makers have conducted the “war on drugs” largely through supply side intervention. As the theory goes, by attacking drug producers, drug prices will rise due to the increased risk faced by suppliers, this risk will in turn be passed along to consumers in the form of higher prices. In order to critically asses the merits of such an expensive antidrug policy it is essential to estimate the price elasticity of demand for drugs.
The main finding of this paper is that cocaine users are extremely price inelastic and that a doubling of cocaine prices will result in approximately a five percent drop in cocaine usage. Further, policy analysis reveals that the theory driving supply side intervention is fundamentally flawed. Over the past thirty years, as antidrug spending has increased fivefold, drug prices have declined be nearly eighty percent – bolstering a conclusion that American policy makers need to rethink the “war on drugs”.
Bartuska, Gustave A., "Rehab or Relocation? Estimating the Demand for Cocaine through an American Port City Analysis" (2008). Syracuse University Honors Program Capstone Projects. 549.
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