Would Liberalization Lead to Epidemic Cocaine Consumption?

Year
2012
Type(s)
Author(s)
Norman V. Loayza, and Naotaka Sugawara
Source
Applied Economics Letters, September 2012, Volume 19, Issue 14, Pages 1405-1409
Url
https://doi.org/10.1080/13504851.2011.631882

This article uses cross-country data to estimate the potential effect of drastic reductions in the price of cocaine on the share of the population that consumes this drug. In order to identify movements along the cocaine consumption/demand function, this article instruments for cocaine prices with variables that affect the supply of cocaine. Liberalization of drug policies would produce an increase in the prevalence of cocaine consumption. However, the quantitative evidence presented here suggests that, even if substantial, this increase would not amount to epidemic cocaine use.