Drug Laws and the Market for Cocaine
Freeborn’s dissertation was an economic study of the market for powder and crack cocaine using data collected from the Drug Enforcement Agency from 1984 to 2001. She examined how drug dealers make decisions regarding what type of cocaine package to produce. The benefit to dealers is the total revenue they receive from the packages they sell, and the cost to dealers is both the monetary cost of purchasing the wholesale cocaine and the legal penalty if they are caught selling cocaine. These legal penalties vary greatly by state, providing different incentives to dealers based on geographical location. This project created and estimated a model of the market for cocaine. This model can then be utilized to analyze a number of different public policy questions.