The price elasticity of demand for illicit drugs: A systematic review

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Payne, Jason
Manning, Matthew
Fleming, Christopher
Hien-Thuc, Pham
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2020
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Abstract

Three pillars—harm reduction, demand reduction and supply reduction—underpin the harm minimisation framework of Australia’s drug policy. Much of the activity undertaken by law enforcement is aimed at reducing the availability of illicit drugs and thereby increasing price and reducing demand. This article presents a contemporary, systematic review of research exploring the price elasticity of demand for illicit drugs. Overall, the results indicate that the demand for illicit drugs is, on average, weakly price inelastic—a 10 percent increase in the price of illicit drugs results in a decrease in demand of approximately nine percent. The degree of elasticity varies by drug type, with the greatest elasticity indicated, albeit on a small number of studies, for amphetamine-type substances. The international differences seen point to a need for more Australian research, ideally with robust experimental methodologies and across a range of drug types.

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Trends and Issues in Crime and Criminal Justice
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© 2020 Australian Institute of Criminology. The attached file is reproduced here in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
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Subject
Criminology
Law in context
Legal systems
Social Sciences
Criminology & Penology
BEHAVIORAL ECONOMIC-ANALYSIS
MARIJUANA DEMAND
POLYDRUG ABUSE
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Payne, J; Manning, M; Fleming, C; Hien-Thuc, P, The price elasticity of demand for illicit drugs: A systematic review, Trends and Issues in Crime and Criminal Justice, 2020, (606), pp. 1-19
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