I'm fascinated by pricing on illicit substances. Earlier I wondered whether commodities, like marijuana went up and down with general inflation. Chris Dillow points to a fascinating study:
The law of one price doesn't apply - at least for cannabis. According to this survey (pdf), cannabis resin costs twice as much in Manchester as in Liverpool. Which raises the question: why isn't there arbitrage? Why don't traders buy blow from Scousers, drive 35 miles, and sell it to Mancs?
Dillow offers a few possible theories including:
2. Quality differences. Maybe the good is better quality in Manchester.
Perhaps. In college, people we knew had all kinds of theories about where the best stuff was grown. Oddly, most of their reasons were totally contradictory (that place is great, cause it's really cold in the summer... the heat makes for great stuff... you get the point).
Hey, no wonder George Soros is such an advocate of drug decriminalization.
In re "illicit" substances, I see their pricing governed the same way as any pricing. Or have you not noticed that you find item X on sale online for anywhere from $Y to 3x $Y?
See also http://www.discosf.com/johnlogic/DeAnza/BUS69/POWecon.html
While the 'substances' involved weren't weed, a POW camp's black market is at least as illicit as the marijuana economy in the US.
Posted by: wcw | September 14, 2006 at 11:32 PM
Cannabis is an annual, dioecious, flowering herb. The leaves are palmately compound or digitate, with serrate leaflets. The first pair of leaves usually have a single leaflet, the number gradually increasing up to a maximum of about thirteen leaflets per leaf(usually seven or nine), depending on variety and growing conditions. At the top of a flowering plant, this number again diminishes to a single leaflet per leaf. The lower leaf pairs usually occur in an opposite leaf arrangement and the upper leaf pairs in an alternate arrangement on the main stem of a mature plant.
Cannabis normally has imperfect flowers, with staminate "male" and pistillate "female" flowers occurring on separate plants. It is not unusual, however, for individual plants to bear both male and female flowers.
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