title: The entry of Colombian-sourced heroin into the US market: the relationship between competition, price, and purity.
abstract: There have been large structural changes in the US heroin market over the past 20 years. Colombian-sourced heroin entered the market in the mid-1990s, followed by a large fall in the price per pure gram and the exit of Asian heroin. By the 2000s, Colombian-sourced heroin had become a monopoly on the east coast and Mexican-sourced heroin a monopoly on the west coast with competition between the two in the middle. We estimate the relationship between these changes in competitive market structure on retail-level heroin price and purity. We find that the entry of Colombian-sourced heroin is associated with less competition and a lower price per pure gram of heroin at the national level. However, there is wide variation in changes in market concentration across the US. Controlling for the national fall in the heroin price, more competition in a region or city is associated with a lower price per pure gram.
authors.affiliation: Dalhousie University, Departement of Economics Halifax, NS B3H4R2, Canada. Electronic address: Daniel.Rosenblum@dal.ca.
authors.forename: Daniel
authors.initials: D
authors.lastname: Rosenblum
authors.affiliation: School of Social Work, University of Maryland at Baltimore, 525 West Redwood Street, Baltimore, MD 21201, USA.
authors.forename: George Jay
authors.initials: GJ
authors.lastname: Unick
authors.affiliation: Department of Family & Community Medicine, University of California, San Francisco, Parnassus Heights, Box 0900, MU-3E, 500 Parnassus Avenue, MU3E San Francisco, CA 94143-0900, USA.
authors.forename: Daniel
authors.initials: D
authors.lastname: Ciccarone
mesh_terms: D003105:Colombia; D003132:Commerce / Q000191:economics* / Q000639:trends; D004340:Drug Contamination; D004465:Economic Competition / Q000191:economics* / Q000639:trends; D003932:Heroin / Q000191:economics*; D014481:United States
chemical_list: D003932:Heroin
keywords: Competition; Heroin price; Heroin purity; Illicit drug markets; US