convergence

Global Scale and Impact of Illicit Trade
estimate being close to half of the previous global estimate of approximately €125 billion
(USD142 billion). The report explains: “Total consumption, therefore, is constructed as the
sum of user-specific amounts consumed in a given year. The amount consumed, in turn, is
the product of the number of days in which the drug was reportedly consumed, the typical
amount consumed on those days, and the number of users who fall into a specific user-group
category.” 20 Finally, it obtains total expenditure by multiplying the amount by the typical price.
The RAND report also notes:
that the UNODC figures imply that retail cannabis expenditures in the U.S. are close
to €40 billion—more than three times the figure we generate as our best estimate.
This is not entirely surprising since the UNODC assumes that every past year user
consumes on average 165 grams whereas we assume an average of 96 grams. Further,
the UNODC applies an average retail price that is more than twice as high as the
figure we use (€4.8 and €12.5, respectively). 21
The point is that small differences between two methods on, say, the measurement of drug
price and drug consumption can lead to strikingly different estimates. And in its conclusion,
the same report notes that “surprisingly little is known about typical quantities consumed of
illicit drugs, which makes generating demand-side estimates difficult.”
Calculating demand-side estimates is even harder for other drugs. According to the
RAND report, “Given the popularity of cannabis across the globe, there is relatively more
information available about cannabis prevalence and consumption patterns. Thus, more
confidence can be placed in these estimates than those for the other drug markets.” However,
for the two other major drugs, supply-side estimates can be more precise since, according
to UNODC, “unlike opium and coca, for which relatively reliable production data can be
obtained, estimates on cannabis production [are] often based on perception and scientifically
valid monitoring systems are the exception.” 22
Given the overall lack of reliability of estimates, or their large variations when indicated,
one may wonder if knowing more precisely the size of the illicit drug markets is of such great
importance. In its critique of existing drug estimates and their influence on drug policymaking,
Reuter asks:
Does this mismeasurement [of the global drug market] matter? For those interested
in the size of the underground economy, the answer is clearly yes; estimates of the largest
illegal market are potentially of considerable significance. However, the estimates
were not developed for those purposes but to help in the development of drug policy. If
policymaking regarding drugs were rational, or at least as analytically driven as say
monetary policy, then the exaggeration would be a serious problem. 23
Regarding the contribution that more accurate figures on the drug market would have on
our understanding of the impacts, Thoumi argues that “what has been important is not merely
the size of the trade, but its ability to alter social behaviors, increase corruption and crime,
and fund insurgent and counterinsurgent guerrillas. The size of the illegal drug industry is
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