Is it possible the war on drugs is to blame for increased potency in marijuana and for how crack ravaged inner cities in the 1980s? Prof. Adam Martin explains how the drug war has altered incentives for both drug buyers and sellers, leading them to favor higher potency drugs. This is what economists call the potency effect.
As penalties for purchasing marijuana go up, for example, the cost difference between high- and low-potency marijuana decreases and people may think that if they’re risking a fine or jail time anyway they may as well buy the stronger drugs. Similarly, cartels and dealers have shifted their focus to high-value, high-potency drugs like cocaine as a result of the steeper fines and penalties for drug trafficking.
The potency effect is just one of many economic forces that make markets so complex. Public policies that alter the incentives people face – as the war on drugs does – can lead to unintended and even dangerous consequences.