The impact of law enforcement activity on a heroin market

It may be argued that seizing large quantities of heroin being imported into the country should decrease its supply and hence increase its price, resulting in a reduction in the quantity of the drug being purchased or consumed. To date, however, there has been no empirical evidence that heroin seizures in Australia have any effect on the price of heroin at street level. This article describes a 2-year research study during which the price and purity of street-level heroin were regularly monitored. It was found that heroin seizures had no effect on the price, purity or perceived availability of heroin at street level. It was further found that admissions to methadone treatment were not affected by the price or perceived availability of heroin or by local arrests for heroin use/possession, nor was any relationship found between these arrests and the price of street-level heroin. Nevertheless, two-thirds of those who sought entry to local methadone programmes indicated the price as a reason for stopping using heroin. This paper argues that supply-side law enforcement should only be used as a strategy for maintaining high heroin prices if the demand for heroin can be shown to be price-elastic and, further, that the costs of such a strategy need to be weighted against the benefits.