Cover: Estimating the size of the global drug market: A demand-side approach

Estimating the size of the global drug market: A demand-side approach

Report 2

Published Apr 21, 2009

by Beau Kilmer, Rosalie Liccardo Pacula

Download eBook for Free

Full Document

FormatFile SizeNotes
PDF file 0.6 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

Summary Only

FormatFile SizeNotes
PDF file 0.1 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

The size of a market is based on factors influencing both demand and supply. Changes in market size, therefore, provide valuable information about the net effects of movements in both parts of the market. For example, while the number of users may decrease in response to a prevention policy targeting initiation, total expenditures may simultaneously increase due to factors shifting more light users into heavy use or an increase in supply. Therefore, estimating the size of the market, in terms of both participants and expenditures, is critical to fully understanding the impact of interventions intended to influence demand and/or supply.

This report uses data on the prevalence of drug use, retail prices, and consumption patterns to generate country-level consumption and retail expenditure estimates for cannabis, heroin, cocaine, and amphetamine-type substances. Major findings include:

  • Global retail expenditures on cannabis to range from €40B-€120B. Our best estimate is close to half of the previous global estimate of approximately €125B.
  • Exporting cocaine hydrochloride from Colombia to consuming countries generates a value of no more than €10B annually (import price-replacement cost). The equivalent value for opiates exported from Asia and the Americas is no more than €20B.
  • Surprisingly little is known about typical quantities consumed of illicit drugs, which makes generating demand-side estimates difficult. For cannabis, much could be learned by adding a few questions to existing surveys. For harder drugs, arrestee surveys can provide a wealth of information.

Research conducted by

The report generates country-level consumption and retail expenditure estimates for cannabis, heroin, cocaine, and amphetamine-type substances.

This report is part of the RAND technical report series. RAND technical reports may include research findings on a specific topic that is limited in scope or intended for a narrow audience; present discussions of the methodology employed in research; provide literature reviews, survey instruments, modeling exercises, guidelines for practitioners and research professionals, and supporting documentation; or deliver preliminary findings. All RAND reports undergo rigorous peer review to ensure that they meet high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND 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.