Illicit drug prices and quantity discounts: A comparison between a cryptomarket, social media, and police data

Illicit drugs are increasingly sold on online platforms, namely through social media and cryptomarkets. These are generally viewed as less risky than conventional drug trades. The Risks & Prices framework argues that risk is the principal cost in the drug trade, and we study whether prices online differ from law enforcement estimates. We use data from a Swedish cryptomarket (n = 826), Facebook (n = 446) to examine the price of cannabis resin (hash), cocaine and herbal cannabis using multilevel regression. We compare these to law enforcement estimates. We find that price levels are similar between markets, but that cocaine is slightly more expensive on social media. Quantity discounts are estimated in the range of -0.10 and -0.21. Despite high competition on cryptomarkets we do not consistently observe lower prices. Compared to law enforcement estimates we find similar prices at the 1 gram level for hash and cocaine. These findings suggest that data from online drug markets can be used to examine prices more generally by constituting a new data source for supply-side prices.