Table 2.

Effect of Market Concentration on Heroin Price and Purity, 1990–2008

	National Estimates		Regional Estimates		MSA Estimates Heroin HCL/B
	Heroin HCL/B	Heroin SU	Heroin HCL/B	Heroin SU
ln(Price Per Pure Gram)
Market Concentration	−3.296*** (0.797)	−2.748** (0.853)	0.838*** (0.173)	1.539*** (0.461)	0.290** (0.115)
Regional Fixed Effects	no	no	yes	yes	no
MSA Fixed Effects	no	no	no	no	yes
Year Fixed Effects	no	no	yes	yes	yes
Observations	19	19	144	144	458
R-Squared	0.46	0.21	0.87	0.58	0.69
ln(Price Per Non-Pure Gram)
Market Concentration	−3.834*** (0.559)	−3.717*** (0.556)	0.022 (0.111)	0.103 (0.413)	0.062 (0.083)
Regional Fixed Effects	no	no	yes	yes	no
MSA Fixed Effects	no	no	no	no	yes
Year Fixed Effects	no	no	yes	yes	yes
Observations	19	19	144	144	475
R-Squared	0.74	0.48	0.86	0.49	0.78
Purity (percentage points)
Market Concentration	−21.95* (12.57)	−19.56 (11.29)	−28.34*** (5.32)	−22.02** (10.07)	−7.67* (3.43)
Regional Fixed Effects	no	no	yes	yes	no
MSA Fixed Effects	no	no	no	no	yes
Year Fixed Effects	no	no	yes	yes	yes
Observations	19	19	144	144	458
R-Squared	0.09	0.08	0.77	0.53	0.70

Robust standard errors in parentheses. Prices in constant 2008 dollars. Regional estimates are from 1991–2008 due to limited observations in 1990. MSA estimates are from 1992–2008 due to limited observations in some MSA’s in 1990 and 1991. There is one missing MSA data point for Orlando in 1993 due to a lack of data on heroin source for that year. There were not enough observations of heroin SU to analyze the effect of market concentration on this subgroup at the MSA-level. Purity and price estimated for 0.5 grams of heroin.

^*p < 0.1,

^**p < 0.05,

^***p < 0.01