Unintended consequences of enforcement in illicit markets

James Prieger () and Jonathan Kulick

Economics Letters, 2014, vol. 125, issue 2, 295-297

Abstract: Legal enforcement of bans on goods can reduce the size of the black market but lead to greater violence by increasing revenue in the illicit market. However, the link between enforcement and violence is not as simple as is suggested by the textbook model, even for a competitive market. Nevertheless, under plausible assumptions more enforcement on trafficking in the illicit good leads to more violence.

Keywords: Black markets; Violence; Menthol cigarettes; Risk tax; Enforcement cost (search for similar items in EconPapers)
JEL-codes: H89 K42 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:125:y:2014:i:2:p:295-297

DOI: 10.1016/j.econlet.2014.09.025

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