Let it snow! Let it snow! Let it snow! Estimating cocaine production using a novel dataset based on reported seizures of laboratories

Background: data on cocaine market appear to be inconsistent, as they tend to show declining prices vis a vis a steady or increasing demand and a declining supply. This paper proposes an explanation by providing evidence of an under-estimation of the supply of cocaine. Methods: we put forwa d a conservative estimate of cocaine production in Colombia for year 2008 by means of reported seizures of laboratories made by the counteracting organisations operating in the Colombian territory. ∗A preliminary version of this paper was presented to the Conference “Cento anni di controllo internazionale sulle droghe”, Forl̀ı, 21-22 April 2009, to the ESSD Annual Conference, Belfast, 24-26 September 2009, and to the ISSDP Annual Conference, Santa Monica (CA), 15-16 March 2010. The authors are grateful to the participants for comments and suggestions. Sandro Donati was instrumental to the decision to commit ourselves to the difficult task of elaborating these new and, hopefully, provocative ideas: we thank his intelligence, patience and enthusiasm. We would like to thank three anonymous referees and the editor of the journal for very useful and detailed comments. Francesco Rentocchini acknowledges funding from the Autonomous Province of Trento (Grant 2009 Outgoing: OVERNET). The usual caveats apply. †Department of Economics, University of Bologna (I) and CERIS–CNR, Milan (I) [email protected] ‡Department of Economics, University of Trento (I) and INGENIO–UPV, CSIC, Valencia (E) [email protected]