The Price of Illicit Drugs: 1981 through the - The White House

overstate drug prices at the U.S. border. Because imports are usually seized, not purchased, price
information is seldom available for them. That is, prices at the border are almost certainly lower than the
lowest prices shown in these figures.
As mentioned, illicit drugs often are transacted at fixed prices that remain constant over time. For example,
crack cocaine is often sold as a $10 rock and heroin is often sold in a $20 bag, regardless of purity or
volume. The size of the rock and the purity of the bag change over time, however, which means that the
standardized price, or the price per pure gram, changes significantly over time. The figures reported here
are intended to capture trends in standardized prices and are expressed in terms of price per pure gram.
In addition to the above, the report introduces an alternative way to estimate retail prices for cocaine and
heroin (Statistical Appendix, section 4). At retail, cocaine and heroin are typically transacted at fixed
prices of $10, $20, $40 and so on up to about $100. Using the STRIDE data, we estimated the amount of
pure cocaine/heroin for each purchase conditional on the amount paid for that purchase. Then we used
results from a special addendum to the Drug Use Forecasting survey to weight each dollar category by the
distribution of prices that users actually pay on the street. This weighted average is a measure of pure
cocaine/heroin actually purchased per dollar spent. We use the inverse of that estimate – the price per pure
gram – as the estimate of retail prices.
This alternative approach to estimating retail prices provides a transitional methodology that will take
advantage of data emerging from NIJ’s Arrestee Drug Abuse Monitoring (ADAM) program and
SAMHSA’s National Household Survey on Drug Abuse (NHSDA). One problem with the current
application is its reliance on purchase data from just six cities for only one year (Q3 1995 – Q2 1996).
Another problem is that the addendum data are limited to cocaine and heroin purchases. ADAM data will
come from at least thirty-five cities, and they will include all drugs of interest. New versions of the
National Household Survey on Drug Abuse will include questions about the purchase of marijuana. Thus,
this alternative approach to estimating retail price-series will improve with the expansion of ADAM and the
NHSDA.
Beyond the alternative model for retail cocaine and heroin prices, there are several differences between the
methods used in the current 1981-2000 report and those used in the previous 1981-1998 report. Firstly, the
raw quarterly database (STRIDE 1 in Figure A1) for 2000 contained slightly different numbers of
transactions than the raw quarterly database for 1998. For example, the number of transactions in the first
two quarters of 1998 was 162 and 202 in the 2000 database but only 153 and 170 in the 1998 database.
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