Prices and Volumes in Illicit Markets, Theories of

Illegal drugs are consumer goods; they are produced, distributed, and sold through markets. Price, along with quantity, is a fundamental attribute of a market, so policy pays considerable attention to drug prices as well as to measures related to quantity, such as the prevalence and consequences of use. Price and quantity are jointly determined by the intersection of supply (willingness of dealers to provide the drugs) and demand (desire of users to consume the drug). Only by studying price and quantity together can one fully understand what is driving market changes over time.