 What fueled the illicit opioid epidemic? New evidence from a takeover of white powder heroin marketsJ. Travis Donahoe and Adam Soliman CEP Discussion Papers from Centre for Economic Performance, LSE Abstract: In recent years, the majority of drug overdose deaths in the U.S. have involved illicitly-produced opioids (primarily heroin and fentanyl), overtaking prescription opioids as the main driver of the opioid epidemic. In this paper, we document a previously unexplored shift in heroin markets that played a critical role in driving this transition: the takeover of white powder heroin production by Mexican Drug Trafficking Organizations (DTOs) from Colombian DTOs beginning in 2012, which resulted in heroin that was adulterated with fentanyl and more variable in potency. Using a difference-in-differences approach that exploits the fact that white powder heroin markets were exposed to these heroin quality shocks while black tar heroin markets were not, we find that they increased heroin and fentanyl death rates by roughly 230% and 890%, respectively, from 2012 to 2019. Previously studied legal market interventions cannot explain these effects, and we shed light on key aspects of the evolving epidemic that were thus far unexplained. We conclude that shocks to heroin quality are a major determinant of the transition to the illicit opioid waves of the epidemic. Keywords: overdose epidemic; illicit opioids; segmented market; Crime (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp2073 Access Statistics for this paper More papers in CEP Discussion Papers from Centre for Economic Performance, LSE |
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