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Globalization and the price decline of illicit drugs

机译：全球化与非法药物价格下降

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Background: This study aims at understanding the mechanisms underlying the dramatic decline of the retail prices of major drugs like cocaineand heroin during the past two decades. It also aims at analysing the implications of this decline for drug policies.Methods: We use a theoretical model to identify the possible causes of this price decline. This allows us to formulate the hypothesis thatthe major driving force behind the price decline is a reduction of the intermediation margin (the difference between the retail and producerprices). We also develop the hypothesis that globalization has been an important factor behind the decline of the intermediation margin. Wethen analyse the statistical information to test these hypotheses.Results: We find that the decline in the retail prices of drugs is related to the strong decline in the intermediation margin in the drug business,and that globalization is the main driving force behind this phenomenon. Globalization has done so by increasing the efficiency of thedistribution of drags, by reducing the risk premium involved in dealing with drugs, and by increasing the degree of competition in the drugmarkets.Conclusion: We conclude that the cocaine and heroin price declines were due to a sharp fall in the intermediation margin, which was probablyinfluenced by globalization. This phenomenon might have a strong impact on the effectiveness of drug policies, increasing the relativeeffectiveness of policies aiming at reducing the demand of drugs.
机译：背景：本研究旨在了解在过去的二十年中可卡因和海洛因等主要药物零售价格急剧下跌的潜在机制。方法：我们使用理论模型来识别价格下跌的可能原因。这使我们可以提出一个假设，即价格下跌背后的主要驱动力是中间利润的减少（零售价格和生产者价格之差）。我们还提出了一个假设，即全球化已成为中介利润下降的重要因素。结果：我们发现药品零售价格的下降与药品业务中介利润的大幅下降有关，全球化是这一现象的主要推动力。全球化通过提高药物分配的效率，降低了与毒品交易有关的风险溢价以及提高了药品市场的竞争程度来实现。结论：我们得出结论，可卡因和海洛因的价格下降是由于中介利润率急剧下降，这可能受到全球化的影响。这种现象可能会对禁毒政策的效力产生重大影响，从而增加旨在减少毒品需求的政策的相对效力。

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