Tracking the cost of your habit
Index shows that in the US, vices have got a lot more expensive
● The cost of maintaining a drugs, booze and cigarettes habit got a lot more expensive in the US last year, rising the most of almost anywhere in the world, the annual Bloomberg Global Vice Index shows.
Americans had to fork out over $200 (about R2 400) more for a basket of socalled vice goods last year versus 2016, with only New Zealand seeing a bigger increase.
The gauge compares the share of income needed to maintain a broad weekly habit of cigarettes, alcohol, marijuana, amphetamines, cocaine and opioids across more than 100 countries. Doing so eats up more than a third of the average weekly pay cheque in more than three-quarters of the economies tracked, the index shows.
The gauge is purely an economic indicator, not a judgment about morality or legality. Nor does it track gambling, prostitution or other illicit activities.
Vice is cheapest in Luxembourg, where the cost comes in at less than 10% of the $2 071 average weekly wage, which is the highest in the world. The Bahamas, Switzerland, Iceland and France round out the top five for affordability. By contrast, Ukrainians must spend 13 times their weekly salary for the same fix, making it one of the costliest places for those making local wages. Pakistan, Nepal and Burkina Faso also score near the top for higher prices.
The vice indicator uses US prices as the global benchmark. At 54% of pay, or $617, the US ranked 38 in terms of affordability, compared with 17 a year earlier.
In absolute terms, the gross weekly cost exceeded $1 000 in only three countries: Japan, New Zealand and Australia.
By comparison, the basket ran less than $100 in 21 mostly tropical countries, including the Dominican Republic, Ghana, the Republic of Congo, Colombia, South Africa, Guatemala, Kenya and Myanmar.
While laws remain a key factor for narcotics prices, those dynamics may be in flux as more drug sales move online. The new avenues make some drug markets less risky as they let users “buy drugs with a cryptocurrency,
such as bitcoin, and have their purchases delivered to them”, the UN 2017 World Drug Report says.
“Something like bitcoin has appealed to dealers because it’s anonymous,” said Jonathan Caulkins, a professor at Carnegie Mellon University in Pittsburgh and former co-director of RAND’s Drug Policy Research Centre. “Banking creates a trail.”
Vice prices tumbled the most in Iran, Norway and South Korea, all of which saw the weekly tab for the basket fall by more than $200 from the prior year.
The difficulty in collecting data on illegal activity means survey responses often have a lag, which makes comparisons harder. As a result, countries with missing data weren’t included in the overall index.
This year’s index also included the size of the “shadow” drug economy in various regions by approximating the retail value of narcotics seized by law enforcement.
Like other businesses, retail-wholesale pricing dynamics and supply-chain management are the keys to efficiency.
“A shadow economy, or underground economy, is run as an efficient business like the official one,” said Friedrich Schneider, an economics professor at Johannes Kepler University in Linz, Austria.
On markups for narcotics prices, “cannabis markets tend to be more competitive in most countries, especially because it is frequently produced locally”, according to Manolis Galenianos, an economics professor at Royal Holloway University of London.
“Cocaine and opioids, by contrast, have to be imported from abroad, which requires a much higher level of sophistication, leading to more concentrated markets and higher markups,” Galenianos said.
The gauge is purely an economic indicator, not a judgment