Jakub Červený, Jan van Ours, 28 September 2019

With the recent trends in legalisation and with the transition of illegal drug markets to the internet, much more detailed information about the price and quality of cannabis is now available, making an analysis of the determinants of prices easier. This column analyses data collected over a two-week period in 2015 from a dark web marketplace, which details about 500 cannabis prices from around 140 sellers in 18 countries. It concludes that the internet-based cannabis market is characterised by monopolistic competition, where many sellers offer differentiated products with quality variation causing dispersion of cannabis prices. 

Jonathan Ashworth, 08 February 2019

On 17 October 2018, Canada legalised recreational cannabis use, with an immediate effect on how Canadian people use cash. Jonathan Ashworth explains to Tim Phillips how legalisation crimps the black economy.

Charles Goodhart, Jonathan Ashworth, 22 January 2019

Canada is the first major developed nation to have legalised recreational cannabis use. This column argues that movements in cash in circulation around the time of legalisation seem to provide early evidence that Prime Minister Trudeau’s policy has already been successful in crimping the black economy. If around one-quarter of the cannabis market remains illegal, as recently estimated by Statistics Canada, over time legalisation could reduce the size of the total underground economy by around 4% or 5%.

Ceyhun Elgin, Oguz Oztunali, 10 May 2012

Shadow economies – sometimes called the black market or informal economy – exist in every country. But how big are they? This column presents some new approaches to estimating their size and uses them to compare shadow economies across rich and poor countries over the last 60 years.

Maurizio Bovi, 10 November 2010

Workers across Europe are suffering from what economists are calling a dual labour market. One side with permanent jobs, sheltered from risk, leaving the other side – the temporary workers – exposed to the vagaries of the market. This column argues that policymakers need to consider a third dimension – the shadow labour market. If they do not, the column warns that policymakers could make things far worse.

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