SUPPLY-SIDE RESPONSE TO DECLINING HEROIN PURITY: FENTANYL OVERDOSE EPISODE IN NEW JERSEY
Article first published online: 6 JUN 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Volume 23, Issue 6, pages 688–705, June 2014
How to Cite
Hempstead, K. and Yildirim, E. O. (2014), SUPPLY-SIDE RESPONSE TO DECLINING HEROIN PURITY: FENTANYL OVERDOSE EPISODE IN NEW JERSEY. Health Econ., 23: 688–705. doi: 10.1002/hec.2937
- Issue published online: 6 MAY 2014
- Article first published online: 6 JUN 2013
- Manuscript Accepted: 10 APR 2013
- Manuscript Revised: 19 NOV 2012
- Manuscript Received: 19 MAR 2011
- substance abuse;
- illegal drugs;
The inelastic price demand observations characteristic of illegal drug markets have led to the conclusion that the burden of a negative supply shock would be completely reflected to consumers. This paper argues that the increasing availability of prescription opioids may threaten heroin sellers' profit margin and force them to find alternative methods to compensate buyers in the event of a supply shock. We investigate the 2006 fentanyl overdose episode in New Jersey and argue that the introduction of non-pharmaceutical fentanyl, its spatial distribution, and the timing of overdose deaths may have been related to trends in heroin purity. Using medical examiner data, as well as data from the Drug Enforcement Administration, Office of Diversion Control on retail sales of prescription opioids in a negative binomial specification, we show that month-to-month fluctuations in heroin purity have a significant effect on fentanyl-related overdoses, particularly in those areas where prescription opioids are highly available. Copyright © 2013 John Wiley & Sons, Ltd.