

Additional Sourcing
1. Following the money
This table demonstrates how the purity and price of illegal drugs changes through the distribution system. It costs less than $1,000 to purchase enough coca and opium from farmers to produce a pure kilogram and that amount fetches well over $100,000 on the streets. In general, at each stage in the distribution chain the purity decreases as suppliers add adulterants to the product. The price per pure kilogram also increases at each link in the chain, with large jumps occurring when the product is smuggled across borders. Since price and purity data are limited and the values can fluctuate dramatically within a year and within a country, these estimates should be considered reasonable rather than precise.
Reasonable price and purity estimates for 1 kilogram of cocaine and heroin through the distribution system, circa 2007
| Cocaine-1 kilogram | Heroin-1 kilogram | ||||||
Stage | Raw Price | Purity | 100% Pure | Location | Raw Price | Purity | 100% Pure | Location |
Farm-gate1 | $800 2 | 100% | $800 | Colombia | $900 7 | 100% | $900 | Afghanistan |
Export | $2,200 3 | 91% 5 | $2,400 | Colombia | $3,400 8 | 73%12 | $4,700 | Afgn. neighbors |
Import/ Wholesale (Kg.) | $14,500 4 | 76% 4 | $19,000 | Los Angeles | $10,000 9 | 58%13 | $17,000 | Turkey |
Mid-level/ Wholesale (Oz) | $19,500 4 | 73% 4 | $27,000 | Los Angeles | $33,00010 | 50%14 | $66,000 | England/Wales |
Typical retail price-Country | $78,000 | 64% 6 | $122,000 | U.S. | $105,00011 | 44%11 | $239,000 | U.K. |
Notes: These figures come from several publicly available sources and are rounded to highlight the uncertainty. If ranges are available or information is derived from multiple sources, estimates presented based on the midpoint. The raw price represents the value of a typical kilogram with adulterants included. When we divide the raw price by typical purity we generate the price per pure gram (100% pure).
Sources
Atasoy S. The opiate trade in Turkey. Report submitted for the project Modeling the World Heroin Market: Assessing the Consequences of Changes in Afghanistan Production. Istanbul: Mimeo, 2004.
European Monitoring Centre for Drugs and Drug Addiction. 2008 Statistical bulletin. Lisbon, European Monitoring Centre for Drugs and Drug Addiction, 2008
Matrix Knowledge Group. The illicit drug trade in the United Kingdom, Home Office Online Report 20/07, 2007.
Office of National Drug Control Policy. Los Angeles, California Profile of Drug Indicators. http://www.whitehousedrugpolicy.gov/statelocal/CA/losangeles.pdf, 2008a.
Office of National Drug Control Policy. Price and Purity of Illicit Drugs: 1981-2007. http://www.whitehousedrugpolicy.gov/publications/price_purity/price_purity07.pdf, 2008b.
Paoli L, Greenfield V, Reuter P. The world heroin market: can the supply be reduced? New York: Oxford University Press, 2009.
United Nations Office on Drugs and Crime. 2007 World drug report. Vienna, United Nations Office on Drugs and Crime, 2007.
United Nations Office on Drugs and Crime. Coca cultivation in the Andean region. A survey of Bolivia, Colombia, and Peru. Vienna, United Nations Office on Drugs and Crime, Illicit Crop Monitoring Program, 2008a.
United Nations Office on Drugs and Crime. 2008 World drug report. Vienna, United Nations Office on Drugs and Crime, 2008b.
United Nations Office on Drugs and Crime. Afghanistan Opium Survey. Vienna, United Nations Office on Drugs and Crime, Illicit Crop Monitoring Program, 2008c.
United Nations Office on Drugs and Crime. 2008 World drug report. Vienna, United Nations Office on Drugs and Crime, 2008a.
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How High Will It Go?
How the price of oil might superspike once again.
BY THE MCKINSEY GLOBAL INSTITUTE | SEPT. / OCT. 2009
Just months after 2008's expensive summer at the pump, oil prices plummeted -- hitting a low of $32.40 per barrel in December 2008. Consumers and industrial users, hit hard by the financial crisis, scaled back on all types of petroleum products. Months of concern over tight supplies were washed away by a glut of cheap oil.
Yet as signs of recovery have begun to appear, volatile oil prices have started to more or less tick up again, prompting many to wonder what might happen once economic recovery truly begins. Could the world see another oil spike? The likely answer: yes.
In the first half of this decade, oil prices per day tended to rise when global spare capacity -- the difference between supply and demand -- fell to 3 million barrels per day or lower. This is not the case today; projected levels for summer 2009 were at their highest since the 1980s, more than twice the 3 million mark. Recent price hikes can likely be attributed to OPEC, the cartel of oil-producing countries that has imposed strict production quotas and taken spare capacity offline. Traders, who see scarce oil on the horizon once again, could also be pushing up prices in ominous anticipation.
[[INSET-L]]The traders might have the right idea. If oil demand grows as quickly as expected when the world economy recovers, OPEC's spare capacity could be gone within five years. And since the world relies increasingly on unconventional sources of oil (think tar sands), it will take time and money to bring more supply online. Until then, the world will be left with only demand-side measures -- such as boosting energy efficiency and cutting back on use -- to control prices. These, too, will require time, money, and changes in behavior. Meanwhile, prices will rise to clear the market.
All the ingredients are in place for another spike, perhaps as early as 2012, depending on the timing of the economic recovery. Prices could fly up as they did in late 2007 through mid-2008, when they reached nearly $150 per barrel.
Sources: 1: The McKinsey Global Institute (MGI), International Monetary Fund, International Energy Agency, Bloomberg, BP, U.S. Department of Energy/Energy Information Administration (EIA); 2,3,5: MGI; 4: MGI, EIA; 6: EIA
Graphics by Katherine Yester; Barrels: istockphoto.com
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Sex Matters
Low birthrates aren't the result of economic growth and political stability; they're a prerequisite.
BY MALCOLM POTTS, MARTHA CAMPBELL | JULY/AUG 2009
There is a well-known story about how a society stabilizes its population. As a country transitions from poverty to affluence, birthrates plunge—from six or eight children per woman to just about two. Population growth levels off. Prosperity and education, the story goes, are just about the best form of birth control there is. But this tale gets it backward. Low birthrates aren’t a consequence of national wealth; rather, they’re needed to create it. Soaring unemployment, endemic poverty, and flailing schools are quite simply impossible to combat when every year adds more and more people.
Malcolm Potts is Bixby professor at the School of Public Health at the University of California, Berkeley. Martha Campbell is president of Venture Strategies for Health and Development and lecturer at the University of California, Berkeley.
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