A Simple Economic Model of Cocaine Production
RAND CORP SANTA MONICA CA
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This report describes a simple economic model of the cocaine trade. The purpose of the model is to represent the fundamental economic relations that determine the size of the cocaine trade, and to simulate the effects on the trade of policy initiatives or other changes in the surrounding environment. The report begins by describing the policy setting and the variety of programs that have been used, or advocated, to control drug production overseas. It then presents a description of the structure of the model in equation form and estimates of the current state of the cocaine market that are used to parameterize the model. The results of a set of simulations of the model are then presented, and they lead to the following conclusions. Crop substitution programs will have a negligible impact on the world cocaine market. As desirable for other reasons as improving economic conditions in Peru, Bolivia, and Colombia may be, those improvements will not lower cocaine supply.
- Economics and Cost Analysis
- Organic Chemistry