In a recent article on Cannabis seizures the police said:
Based on the New Zealand Drug Harm Index, it was estimated that $379 million worth of social harm had been prevented by the operation
So I looked up the drug harm index and found a release from BERL that stated:
Cannabis is estimated to cause harm of $11,800 per kilogram
Now, I’m confused here. By social harm do we mean that this is the externality associated with a kg of weed? If so that is huge and I am not sure where that is coming from.
If that is the total cost associated with weed it is largely policy irrelevant as (depending on market segmentation), I suspect, that this would mainly be the size of the private cost of buying weed. Given that the transaction is voluntary as, I guess people must get some satisfaction from it when they consume it, this cost must provide a lower bound to the size of the satisfaction associated with the consumption.
In this case the police should say “we prevented $379m of pain AND $400m of pleasure” – when it is put this way it doesn’t sound quite as flashy 😉