Estimates of the total dollar value of the markets for illicit drugs are valuable for policymaking. Such estimates are usually produced by multiplying estimated consumption by price. This paper argues that the relevant price for such calculations is not simply the price of one standard unit. There are substantial quantity discounts for illicit drugs, and there is a distribution of retail purchase sizes. Hence, the average price paid per gram need not equal the price of one gram. This concept is illustrated with calculations for heroin and cocaine.

Originally published in: Addiction, v. 89, no. 7, Jul. 1994, pp. 815-819.

This report is part of the RAND Corporation reprint series. The Reprint was a product of the RAND Corporation from 1992 to 2011 that represented previously published journal articles, book chapters, and reports with the permission of the publisher. RAND reprints were formally reviewed in accordance with the publisher's editorial policy and compliant with RAND's rigorous quality assurance standards for quality and objectivity. For select current RAND journal articles, see External Publications.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.