Determinants of heroin retail prices in metropolitan France: Discounts, purity and local markets

Abstract

Introduction and aims: Field studies have indicated a recent increase in heroin availability and use in France, and yet very little is known about the mechanisms underlying heroin retail prices. This paper offers a first attempt at identifying the determinants of heroin pricing, to measure quantity discounts and assess the influence of purity on street prices, while controlling for a geographical effect.

Design and methods: Data on heroin samples were collected during 2011 in seven urban areas of metropolitan France. Ordinary least squares regression was used to model the associations between price, quantity, purity and other independent variables.

Results: Quantity remains the most influential variable on heroin pricing. We estimate that a 10% increase in the size of a transaction leads to a 2.3% decrease in the unit price. Assessed purity proved to be significant, although in modest proportion. Sociodemographic characteristics, such as gender, users' experience and relationships with dealers, proved to be insignificant. Heroin retail prices vary according to a geographical gradient related to the routes of entry and distribution.

Discussion and conclusions: As a credence good, heroin retail prices in France are affected by more than simply the traditional supply and demand relationship. The results of this study also underline the limitations of a quantitative framework and should be complemented by further ethnographic research to obtain an in-depth understanding of local markets. Policies should be designed to better take local disparities into account.[Lahaie E, Janssen E, Cadet-Taïrou A. Determinants of heroin retail prices in metropolitan France:Discounts, purity and local markets. Drug Alcohol Rev 2016;35:597-604].

Keywords: France; discount effect; heroin; purity; retail price.