Department of Justice is now the Department of Communities and Justice.  Find out more >

cjb134.pdfcjb134 
 AuthorJenny Chalmers , Deborah Bradford and Craig Jones 
 PublishedSeptember 2009 
 Report typeCrime and Justice Bulletin No. 134 
 SubjectDrugs and Drug Courts 
 Keywordsprice elasticity, cross-price elasticity, supply-side drug law enforcement, methamphetamine, ice 
  
 

Download this publication

  
Full report (pdf)

Summary

Aim

Aim
The aim of the current study was to estimate how methamphetamine users would respond to changes in the prices of methamphetamine and heroin, using hypothetical drug purchasing scenarios.

Abstract

Abstract
One of the core objectives of supply-side drug law enforcement is to reduce drug use by raising the cost of buying drugs. The effectiveness of this strategy depends on how illicit drug users respond to the rise in costs. The aim of the current study was to estimate how methamphetamine users would respond to changes in the prices of methamphetamine and heroin, using hypothetical drug purchasing scenarios. A sample of 101 people who reported using  methamphetamine in the past month was recruited from primary healthcare facilities in Sydney, Wollongong and Newcastle. Participants were given a hypothetical fixed drug budget, presented with a range of drug ‘pricelists’ and asked how many units of each drug on the pricelist they would buy with their drug budget. The prices of methamphetamine and heroin were varied independently across successive trials and the quantity of each drug purchased at each methamphetamine and heroin price was recorded. Results revealed that methamphetamine purchases decreased significantly as the price of methamphetamine increased (a 10% price increase led to an 18%-19% fall), as did heroin purchases in response to heroin price increases (a 10% price increase led to a 16%-27% fall). Among methamphetamine users, increases in methamphetamine prices produced some substitution into heroin. Additionally, dependent methamphetamine users purchased more pharmaceutical opioids while the non-dependent group purchased more cocaine. Dependent and non-dependent heroin users also responded differently to changes in the price of heroin. Dependent heroin users reacted to increased heroin prices by significantly increasing their purchases of methamphetamine, pharmaceutical opioids and benzodiazepines. At the same time they purchased less cocaine. Non-dependent heroin users responded simply by increasing their purchases of pharmaceutical opioids. In most instances where substitution occurred, the fall in consumption of amphetamine (or heroin) was considerably greater than the increase in consumption of other drugs.