Estimation of

Heroin

Availability

1995-1998

Office

of National

Drug Control Policy
ii

December 2000

Estimation of

Heroin Availability

1995-1998

Prepared for:

Office of National Drug Control Policy

Office of Programs, Budget, Research and Evaluations

under HHS contract no. 282-98-0006

Prepared by:

Abt Associates, Inc.

55 Wheeler Street

Cambridge, MA 02138

December 2000
iii

Authors:

Patrick Johnston

William Rhodes NCJ 187082

Kyla Carrigan
iv

Contents

Introduction..................................................................................................................................1

Model of Heroin Availability.........................................................................................................1

U.S. Consumption.........................................................................................................................3

Determination of Source Area .......................................................................................................5

Seizure Levels..............................................................................................................................7

Importation Points........................................................................................................................8

Movement of Heroin from Source Areas into the United States..................................................... 11

CNC Potential Production Estimates............................................................................................ 13

Non-U.S. Consumption............................................................................................................... 14

Conclusions................................................................................................................................ 15

Appendix A – Analysis to Determine in Seizures At United States Entry Points.............................. 19

Endnotes.................................................................................................................................... 21

List of Figures

Figure 1 Overview of a Heroin Flow Model...............................................................................2

Figure 2 Heroin Seized by Year................................................................................................7

Figure 3 Heroin Seized by Year (less than 50 kilograms)............................................................8

Figure 4 Proportion of Heroin Seized by State (Region)..............................................................9

Figure 5 Proportion of Heroin Seized by State Weighted by Seizure Size................................... 10

List of Tables

Table 1 Summary of Calculations Used to Derive Estimates of the Amount of Heroin

Used in the United States............................................................................................4

Table 2 Estimated Source of Heroin Used in the United States.....................................................6

Table 3 Estimated Amount of Heroin from Each Source Area ......................................................6

Table 4 Annual Heroin Seizures by Region of the United States................................................. 10

Table 5 Estimated Percentage of Heroin Entering the United States by Importation Point

for Each Source Area................................................................................................ 11

Table 6 Estimated Percentage of Heroin Entering the United States by Source Area

for Each Importation Point ........................................................................................ 12

Table 7 Estimated Amount of Heroin Entering the United States by Source Area and

Importation Point, 1995-1998.................................................................................... 13

Table 8 Summary of Calculations ............................................................................................. 17
1

Introduction

In December, Abt Associates delivered1 a model for estimating international cocaine movement – the

Sequential Transition and Reduction (STAR) Model. The STAR model builds on the notion of

sequential reduction: the model begins with the amount of cocaine production potential in the source

zone; reduces it as cocaine is seized or consumed in the source zone, transit zone and at U.S. borders;

and finally provides an estimate of cocaine entering the United States. This global production model

advances our understanding of international cocaine trafficking by integrating disparate models and

estimates of the movement of cocaine into the United States.

The modeling approach used for heroin differs from that for cocaine. While the bulk of cocaine

production is destined for the United States, less than five percent of worldwide heroin/opiate

production is sent to the United States,2 so developing a sequential production model is impractical.

Also, dissimilar data are collected for heroin and cocaine. For example, heroin has no counterpart to

the Interagency Assessment of Cocaine Movement (IACM), so we know less about the dynamics of

heroin movement. On the other hand, cocaine has no counterpart to the DEA’s Domestic Monitor

Program (DMP) and Heroin Signature Program (HSP). A heroin availability model must differ from

a cocaine availability model, because it is constructed from a different empirical base.

This section presents a model of the movement of heroin into the United States. Like its cocaine

counterpart model, the heroin flow model seeks to weave together and reconcile various estimation

systems into one comprehensive model. It is an important step toward structuring what is currently

known about the ways that suppliers provide heroin to the United States. Nevertheless, we do not

consider the model as final, because data about heroin trafficking continues to grow, and modeling

improvements will follow from better data.

Model of Heroin Availability

Figure 1 is an overview of the heroin flow model developed in the rest of this report. Note that the

heroin flow model starts with consumption estimates, while its cocaine counterpart begins with

production estimates. These consumption estimates come from the most recent version of a biennial

report that Abt Associates has prepared for the Office of National Drug Control Policy for nearly a

decade.3 Based on an analysis of data from the Heroin Signature and Domestic Monitor Programs,

we partitioned the source of that consumption into four production areas: South America, Mexico,

Southeast Asia and Asia.4

The Federal-Wide Drug Seizure System (FDSS) provides the best estimates of where heroin enters

the United States.5 As shown subsequently, most seizures were in California, Texas (and Arizona),

Florida (and Puerto Rico), and New York (including New Jersey) so the figure identifies those four

principal entry points. The source country of those seizures is estimated from the Heroin Signature

Program (HSP).

According to reports by the Community Epidemiological Working Group (CEWG) and the U.N.

World Drug Report, heroin consumption is minimal within South America and Mexico.

Consequently, most South American and Mexican heroin is probably destined for the United States.
2

In summary, the heroin model develops a consumption-based estimate of the amount of heroin that is

produced in South America and Mexico. After accounting for seizures, U.S. consumption of South

American heroin should roughly equal South American production. Likewise, U.S. consumption of

Mexican heroin should be approximately equal to Mexican production. But only a small proportion

of Asian heroin gets consumed in the United States, so there is no practical way to equate U.S.

consumption of Asian heroin to Southeast and Southwest heroin production.

Figure 1

Overview of a Heroin Flow Model

The Crime and Narcotics Center (CNC) provides a production-based estimate of the heroin

production potential in Colombia and Mexico. After accounting for seizures and other leakage, the

supply-based estimates should agree with the consumption-based estimate at least roughly – if not,

something is wrong with the consumption model, with CNC’s production estimates, or both. CNC

also estimates potential production for Southeast and Southwest Asia, but there is no apparent way to

tie a consumption-based model into those estimates.

Entry Point into the United States

California, Texas, Florida, New York, Other

Data from the Federal-Wide Drug Seizure System

Colombian Production

CNC/DEA

Eradication

CNC

Non-US Consumption

INCSR

Seizures

FDSS/HSP

From South America

Based on HSP

Mexican Production

CNC/DEA

Eradication

CNC

Non-US Consumption

INCSR

Seizures

FDSS/HSP

From Mexico

Based on HSP

Seizures

FDSS/HSP

From Southeast Asia

Based on HSP

Seizures

FDSS/HSP

From Southwest Asia

Based on HSP

Source of Heroin Used in the United States

Domestic Monitor Program

Consumption of Heroin in the United States

Based on the Retail Sales Report
3

U.S. Consumption

For nearly a decade, Abt Associates has produced estimates of the amount of illicit drugs consumed

in the United States. Early estimates were crude, but the methodology has improved over time as new

data have become available. Table 1 summarizes our most recent estimates.

To estimate the amount of heroin used in the United States, we begin with an estimate of the number

of heroin users in the United States. Those users fall into two classes: occasional users (who use less

than once per week) and hardcore users (who use at least once per week).6 Hardcore users seem to

use seventy to eighty percent of the heroin, so estimates of the number of hardcore users play an

especially important role here.

To estimate the number of hardcore heroin users, we begin with data from the Drug Use Forecasting

(DUF) system (now the Arrestee Drug Abuse Monitoring system). The National Institute of Justice

has collected those data on a quarterly basis since 1988. The estimation procedure has several steps,

which are described in a companion report,7 the “retail sales” report. Estimates of the number of

occasional heroin users were tabulated from the National Household Survey on Drug Abuse

(NHSDA). No estimates can be precise, of course, but there seems to be somewhat more than

900,000 hardcore heroin users and somewhat fewer than 500,000 occasional heroin users during the

late 1990s.

Unfortunately, the DUF interview does not ask a person how much he or she spent on a specified

drug, but rather, it asks how much he or she spent on all drugs. We developed a regression model to

infer the amount that is spent on heroin. The dependent variable in that model is dollars spent. The

independent variables are the number of days during which the respondent used heroin, cocaine,

marijuana and other drugs. Some additional assumptions – explained in the retail sales report – are

overlaid on those inferences.

Results from that analysis suggest that hardcore heroin users spend somewhat more than $200 per

week on heroin use. (All dollar estimates have been converted to 1998 dollar equivalents.) As

explained in the retail sales report, this estimate may be low, because it is the estimated median rather

than the estimated mean. The median seemed preferable because the data were highly skewed and

because the $200 seemed to comport with estimates reported in an unfortunately sparse literature.

We had no information on expenditures by occasional users, so we assumed $50 per week.

One additional adjustment is required. Heroin is often earned as income in kind, mostly when heroin

users are themselves dealers (or dealers’ helpers) who take their earnings in trade rather than dollars.

Although estimates are uncertain, we assume that purchased heroin should be increased by 22 percent

in the late 1980s, and by about 11 percent in the late 1990s, to reflect income in kind. The retail sales

report provides justification.

Multiplying the number of heroin users by the amount typically spent on heroin suggests that, during

the late 1990s, about $12 billion was spent on heroin every year. Adjusting for income in kind would

increase the dollar equivalent expenditure to about $13 billion.
Table 1

Summary of Calculations Used to Derive Estimates of the Amount of Heroin Used in the United States

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Hardcore Heroin Users

(thousands) 923 886 797 681 630 694 795 855 917 935 980 977 977

Occasional Heroin Users

(thousands) 170 150 140 395 304 230 281 428 455 597 253 484 514

Median Weekly

Expenditure $446 $446 $417 $364 $308 $266 $236 $226 $221 $219 $214 $211 $209

Total Expenditure

(billions) $21.8 $20.9 $17.6 $13.8 $10.9 $10.2 $10.5 $11.2 $11.7 $12.2 $11.6 $12.0 $11.9

Price per Pure Gram $3,153 $2,407 $2,378 $2,377 $1,925 $1,468 $1,131 $1,089 $1,048 $1,029 $1,029 $1,029 $1,029

Total Amount (MT) 8.5 10.5 8.8 6.8 6.5 7.9 10.5 11.4 12.4 13.1 12.5 12.9 12.9

Source: “What America’s Users Spend on Illegal Drugs, 1988–1998.” Report submitted to ONDCP by Abt Associates Inc., Nov. 23, 1999.

All dollars are expressed as 1998 dollar equivalents.
5

Although the above method provides an estimate of the expenditure on heroin purchased in the

United States, it does not tell us the total weight of heroin used in the United States. If we knew the

price paid per pure gram purchased, we could divide that price into the total expenditure to get a

measure of purchased weight.

Fortunately, for nearly a decade, Abt Associates has produced estimates of the price paid at retail for

a pure gram of heroin. Those estimates are based on a statistical analysis of the System to Retrieve

Drug Evidence (STRIDE) and the Domestic Monitor Program (DMP) data. The methodology is

described in detail in our recent price series report8 for ONDCP and in the recent retail sales report.

Toward the latter part of the 1990s, the price of heroin has been somewhat higher than $1.00 per pure

milligram. Dividing the amount of expenditures by the typical price paid for heroin, and adjusting

for income in kind, we get an estimate of the total amount of heroin used in the United States. In the

second half of the 1990s, Americans seemed to use 12 to 13 metric tons of pure heroin per year.9

Determination of Source Area

The Drug Enforcement Administration supports two programs – the Heroin Signature Program and

the Domestic Monitor Program – to determine the source area (South America, Mexico, Southeast

Asia and Southwest Asia) of heroin sampled at three points: seizures at ports of entry, a random

sample of other seizures and purchases, and DMP purchases.10 We included all samples weighing

less than one gram in a retail-level sample , comprising all the DMP data and several purchases from

the random sample. We used that retail-level sample to estimate the sources of heroin used in the

United States.

Our inferences are based on the retail-level sample, rather than an importation-level sample, because

the retail-level sample comes closest to representing heroin actually consumed in the United States.

Still, raw data tabulations are not very useful, for two reasons. First, some of the retail level samples

have too little drug to afford a signature, so the source area is unknown. This creates some problems,

because Mexican heroin is easily identified and therefore is rarely classified as unknown. To prevent

Mexican heroin from being over-represented in the data, we developed imputation routines for

assigning a signature to every sample in the retail level data where an imputation seemed justified.

Second, the Domestic Monitor Program oversamples in places where heroin use is relatively rare.

(For example, St. Louis has a quarterly sample size of 10 purchases, while Baltimore has the same

sample size but many more heroin users and purchases.) We developed a weighting procedure so that

the signature program would represent a national estimate.

We have been unable to classify about 10% of the heroin seized and purchased since 1995. These

unclassified samples are reported as unknown (UNK) in Table 2, which details estimates for the

percentage of heroin from each source area. Because data were not available for 1998 and later, the

1998 and 1999 estimates are projections – that is, they are the averages for 1995 through 1997.
6

Table 2 Estimated Source of Heroin Used in the United States

Year Mexico S. America SE Asia SW Asia Unknown

1993 26.2 13.1 17.6 9.1 34.1

1994 25.6 27.6 21.4 3.8 21.6

1995 26.4 46.6 11.6 2.6 12.7

1996 26.1 51.2 11.6 4 7.1

1997 22.8 52.5 10 5.6 9.1

1998 25.1 50.1 11 4.1 9.6

1999 25.1 50.1 11 4.1 9.6

Sources: Unpublished analysis of data from the Heroin Signature Program and Domestic Monitor Program

If we are correct about these percentages, and if we are correct that between 1995 and 1998 about 12

to 13 metric tons of heroin was used per year in the United States, then we can derive estimates of the

amount of heroin that comes from each area (Table 3). We do not provide earlier estimates, because

the unknown signature category is comparatively large before 1995.

Table 3

Estimated Amount of Heroin from Each Source Area (metric tons)

1995 1996 1997 1998

Mexico 3.0 3.2 3.0 3.1

South America 5.3 6.3 6.9 6.2

Southeast Asia 1.3 1.4 1.3 1.4

Southwest Asia 0.3 0.5 0.7 0.5

Unknown 1.4 0.9 1.2 1.2

Total 11.4 12.4 13.1 12.5

Source: See Table 1 and Table 2.

According to these calculations, U.S. consumers use somewhat more than 6 metric tons of South

American heroin and somewhat more than 3 metric tons of Mexican heroin. However, the South

American and the Southeast and Southwest Asian estimates might be higher depending on how the

unknown signatures are partitioned across the data.
7

Seizure Levels

Seizures reduce the amount of heroin available for consumption, so the flow model requires estimates

of the amount of heroin seized by U.S. and other authorities. We tabulated heroin seizures reported in

the FDSS from 1991 through the first half of 1998. Results appear in Figure 2. To provide greater

comparability between 1998 and earlier years, we interpolated seizures for the entire year by doubling

seizures from the first half of 1998. The figure reflects that interpolation.

Figure 2

The figure seems to show that seizures have varied between about 1.2 and 1.6 metric tons from 1991

through 1998. There is no apparent trend.

There is a second useful way to look at these data. Between 1991 and 1998, 99.2 percent of all

seizures were less than 10 kilograms. Likewise, 99.7 percent of all seizures were less than 20

kilograms and 99.9 percent of all seizures were less than 50 kilograms. If we exclude all seizures

larger than 50 kilograms from the tabulation, the trend has a different appearance, shown in Figure 3.
8

Figure 3

Discarding seizures greater than 50 kilograms leads to the conclusions that seizures have remained

fairly constant at about 1.2 metric tons. Apparently, exceptionally large seizures can occasionally

lead to spikes in the seizures observed during any year, distorting the trend. When large seizures are

included in the estimates, then, an average seizure rate of 1.3 metric tons may be more representative

of law enforcement success at preventing heroin from entering the United States.

In fact, when imported into the United States, heroin is typically less than 80 percent pure.11

According to the HSP data (for seizures at the importation level only), South American heroin has

been about 80 percent pure since 1995, while Mexican heroin has been about 44 percent pure. Heroin

from Southeast and Southwest Asia has typically been 70 to 75 percent pure. Thus the 1.3 metric

tons of bulk heroin probably translates into somewhat more than 1 metric ton per year of pure heroin

seized while entering the United States.

Importation Points

Where do these seizures occur? Most seizures happen in one of four importation areas, defined:

• New York (includes New Jersey)

• Florida (includes Puerto Rico)

• California

• Texas (includes Arizona)
9

The rest of the seizures occur throughout the United States. Figure 4 shows trends in where seizures

have happened.

The curves shown in Figure 4 are a smoothed representation of how the location of seizures changed

over time. The methodology used to develop these curves is reported in Appendix A. The figure

shows that the proportion of seizures made in New York, represented by the highest line in this

figure, decreased precipitously from 1991 through 1995 and then stabilized. Most of that reduction

was balanced by a dramatic increase and then stabilization of seizures made in Florida.

Figure 4

A second useful way to look at seizures is to weight the seizure by the amount of heroin involved in

the shipment. Figure 5 reports results after weighting.
10

Figure 5

Subsequent to the preparation of figures 4 and 5, the Office of National Drug Control Policy provided

updated tabulations of seizure data. These are displayed in table 4.

Table 4 Annual Heroin Seizures by Region of the United States ( kilograms)

Year

Number of

Seizures

Amount of

Seizures Other Florida NY/NJ Calif. Texas

1989 697 1,293 207 10 845 188 43

1990 743 669 137 13 434 70 16

1991 889 1,432 193 24 558 627 30

1992 1,093 1,233 274 153 631 93 81

1993 1,140 1,481 375 173 709 167 57

1994 1,043 1,268 270 220 568 149 62

1995 1,153 1,524 264 383 574 168 135

1996 1,249 1,343 225 382 466 163 106

1997 1,480 1,588 241 474 551 231 90

1998 1,226 1,448 297 330 534 150 136

1999* 1,062 1,137 229 215 365 175 153

* imputed by doubling first six months

Source: FDSS, provided by Michael Cala, ONDCP
11

Both figures tell similar stories. The only difference is that the second figure suggests that more

heroin was being shipped to New York during 1998 than was true in 1996 and 1997. This may be

true, or given the contrary findings from the previous figure and the table, it may be that a few

especially large shipments have distorted the trend. Also, the smoothing procedure can distort trends

at the end of the period. It would be prudent, therefore, to discount the apparent change of trends in

New York and Florida observed in 1998.

It any rate, one point is clear: By 1995, seizures had decreased markedly in New York, and they had

increased correspondingly in Florida. There was little change in seizures in the rest of the nation. To

the extent that seizures reflect where heroin enters the United States, the geographic movement of

heroin into the United States has been relatively stable since 1995. Figures 4 and 5 imply that less

heroin has been moving through New York and more heroin has been moving through Florida. A

contrary conclusion would be that the same amount of heroin has been moving through New York,

while more heroin has been going through Florida. Given the findings reported in Figures 2 and 3,

however, total seizures have remained about the same, so Florida seizures must have displaced New

York seizures.

Movement of Heroin from Source Areas into the

United States

Table 5 reports the estimated source of heroin that was seized in the five areas identified in the

previous figure. This table is based on seizures made at airports, at the borders, and through the mail.

The probability that a shipment is seized likely varies across conveyance mode and geographic

location, so a simple tabulation of seizure data would be a biased representation of where heroin

enters the United States. To make the tabulations more representative of heroin imports, we weighted

the data so that the source area of heroin seized was the same percentage as the source area of heroin

used in the United States.12 Estimates of the source areas of heroin in the United States have been

reported already in Table 3.

Table 5

Estimated Percentage of Heroin Entering the United States by Importation Point for Each

Source Area

Source Area Importation Point

 California Florida New York Texas Other

Mexico 82.4 0.0 0.0 69.2 53.2

South America 7.1 85.9 60.3 13.0 7.6

Southeast Asia 5.5 0.3 22.9 7.0 17.3

Southwest Asia 0.0 0.4 8.9 0.0 9.7

Unknown 4.9 13.5 7.9 10.8 12.2

Total 100.0 100.0 100.0 100.0 100.0
12

Table 5 should be read down its columns. For example, an estimated 82 percent of the heroin that

entered the U.S. through California came from Mexico. Almost 86 percent of the heroin that entered

through Florida came from South America.

Table 6 reports the estimated percentage of heroin from each source region that entered the United

States through each of the five importation areas. This table should be read across its rows.

Table 6

Estimated Percentage of Heroin Entering the United States by Source Area for Each Importation Point

Source

Area Importation Point

California Florida New York Texas Other Total

Mexico 64.3 0.0 0.0 16.3 19.4 100.0

South America 2.8 52.9 41.3 1.5 1.4 100.0

Southeast Asia 9.9 1.0 71.2 3.8 14.4 100.0

Southwest Asia 0.0 3.1 75.0 0.0 21.9 100.0

Unknown 10.0 43.3 28.3 6.7 11.7 100.0

If weighted seizures are a good reflection of where heroin enters the United States, then 64.3 percent

of Mexican heroin enters through California and 16.3 percent enters through Texas. That is, more

than 80 percent of Mexican heroin probably comes across the Southwest border, and the rest of

Mexican heroin enters the United States through other diverse locations. More than half of South

American heroin enters the United States through Florida, and most of the rest comes through New

York. Almost three-quarters of Southeast Asian heroin enters through New York and the rest goes

through diverse places. Three-quarters of the Southwest Asian heroin also seems to enter through

New York City, and the rest goes through various places. The increased role of South America as a

supplier of heroin explains why Florida has become an increasingly important heroin importation

point.

Table 7 provides another useful way to summarize these data. Multiplying the percentages by source

area (table 6) by the amounts per source area (table 3) provides an estimate of metric tons moved

through each importation point by source area. To develop this estimate, we average across the five

years reported in table 3. Year-by-year seizures are not shown because episodic large seizures can

distort trends from one year to the next.
13

Table 7

Estimated Amount of Heroin (Metric Tons) Entering the United States by Source Area and Importation

Point, 1995-1998

Source

Area

Importation Point

California Florida New York Texas Other Total

Mexico 2.0 0.0 0.0 0.5 0.6 3.1

South America 0.2 3.3 2.6 0.1 0.1 6.2

Southeast Asia 0.1 0.0 1.0 0.1 0.2 1.4

Southwest Asia 0.0 0.0 0.4 0.0 0.1 0.5

Unknown 0.1 0.5 0.3 0.1 0.1 1.2

Total 2.4 3.8 4.2 0.7 1.1 12.3

If we are correct that Americans used about 12.3 metric tons of heroin per year between 1995 and

1998, then table 7 gives some idea of how much heroin from each source moves into the country

through each region of the United States. Of course, there exists considerable uncertainty in estimates

that provide this much detail.

Almost 10 percent of the heroin was classified as unknown – that is, DEA chemists could not assign a

source area to that heroin. Note that, excluding the unknown category, virtually all heroin seized in

Florida came from South America. It seems reasonable to suppose that most of the 13.5 percent of

the heroin seized in Florida and identified as “unknown” also came from South America. This same

reasoning cannot be applied to other places where South America is not the dominant supplier, but it

does suggest that South America’s share of the U.S. market may be greater than is indicated by tables

3 and 7.

CNC Potential Production Estimates

How do our estimates of the amount of heroin from the producer nations compare with CNC’s reports

of production potential? Since 1995, CNC has estimated the production potential of South America

at between 6.1 and 7.5 metric tons. (These estimates are after subtracting eradication losses from

total hectares.) Unfortunately, estimates are of uncertain accuracy because the assumed conversion

ratios from poppy to opium is based on intelligence fieldwork in Southeast and Southwest Asia. We

cannot know for sure whether or not those conversions apply to South America. Nevertheless, we

must take these estimates as the best currently available.

According to our consumption estimates, Americans consume somewhat more than 6 metric tons of

heroin from South America, and United States authorities seize about 0.75 metric tons. Our

consumption/seizure estimates exceed South America’s production capacity, but the difference is not

great.13 This suggests that the estimated 12 to 13 metric tons of total domestic heroin consumption is

about right if somewhat high.
14

Since 1995, CNC’s estimates of the production potential for Mexico vary over time between 4.3 and

6.0 metric tons. According to our estimates, Americans consume somewhat more than 3 tons of

Mexican heroin and another 0.34 metric tons are seized by U.S. or Mexican authorities.14 The

consumption-based estimates are less than the production-based estimates. The Mexican production

estimates suggest that the estimated 12 metric tons of domestic heroin consumption is too low.

CNC’s production estimates for Mexico are inconsistent with our consumption estimates. There

seems to be no ready reconciliation, but speculation may be helpful. CNC emphasizes that its

estimates are for potential production, and actual production may differ. Perhaps Mexico’s

production is well below its potential, but it is difficult to reason why potential production would be

consistently less than realized production. A better explanation comes from CNC’s warning that:

The wide variation in processing efficiency achieved by traffickers complicates the

task of estimating the quantity of cocaine or heroin that could be refined from a crop.

These variations occur because of differences in the origin and quality of the raw

material used, the technical processing method employed, the size and sophistication

of laboratories, the experience of local workers and chemists, and decisions made in

response to enforcement pressures. (INCSR, 1999)

CNC’s assumptions may overstate Mexico’s production efficiency. This is speculation, of course, but

we observe that heroin imports are about 44 percent pure when from Mexico, 80 percent pure when

from Colombia, and 70 to 75 percent pure when from Southeast and Southwest Asia. Because CNC

makes the same assumptions about production efficiency for Mexico as it does for the rest of the

world, the potential production may overstate Mexico’s actual production.

Suppose that Mexican production were 0.59 as efficient as is assumed by CNC. (The 0.59 comes

from dividing 0.44 purity by 0.75 purity.) Then an estimate of Mexico’s actual production would be

between 2.5 and 3.5 metric tons, numbers that agree with the consumption estimates. Using this same

argument, we might assert that Colombian production is 1.07 times more efficient than is assumed by

CNC. This would lead to a higher estimate of Colombia’s production, which would be more

consistent with the consumption estimates. This reasoning is speculative, but not unreasonable in the

face of having no reliable data about the actual production efficiency in Mexico and Colombia.

Non-U.S. Consumption

How much heroin is consumed within Mexico and within South America? What other reductions

occur in the production and distribution systems? Unfortunately the answers to these questions are all

but unknown.
15

Perhaps the most useful published information about consumption comes from reports of the

Community Epidemiological Working Group ( CEWG). The CEWG is focused on the United States,

of course, but most of its reports include sections on consumption in other nations. These reports are

seldom quantitative, because nations outside the United States rarely have data collection systems

affording estimates of domestic consumption. Based on CEWG assessments, we assume that the

consumption of heroin within South and Central America is negligible. Most heroin produced in

South and Central America is probably destined for North American markets.

Canada is a bigger problem. According to CEWG reports, heroin is seen as a major drug problem, at

least in Vancouver and Toronto. But we do not know the amount of heroin used in Canada; nor do

we know the source.15 It seems reasonable to assume that some South American and Mexican heroin

is shipped to Canada, but we do not yet have an estimate of the amount.

Conclusions

Table 8 summarize the calculations made in this report. The table reports estimates for 1995 through

1998. CNC potential production estimates are not available for earlier years; anyway, estimates of

Colombia’s contribution to consumption are uncertain for the period before 1995. Because of year to

year measurement error, we have provided a column that averages over the four years.

On a yearly basis, over this period, Americans consumed about 12.3 metric tons of heroin. About 50

percent (6.2 metric tons) came from Colombia and about 25 percent (3.1 metric tons) came from

Mexico. Seizures account for about 0.75 metric tons from Colombia, so Colombia would need to

produce about 6.9 metric tons to satisfy the U.S. market. Only about 0.3 metric tons are seized from

Mexico. So Mexico would need to produce about 3.4 metric tons to meet U.S. demand.

According to CNC, Colombia has the potential to produce about 6.4 metric tons, which comes close

to satisfying the estimated demand. In fact, with an efficiency adjustment, the four-year consumption

estimate is almost identical to the four-year adjusted production estimate. Also, according to CNC,

Mexico has a production capacity of 5.3 metric tons. This estimate is considerably higher than the

consumption estimate of 3.4 metric tons required to satisfy the U.S. demand. Application of the

efficiency adjustments to Mexico brings consumption (3.4 metric tons) into agreement with

production potential (3.1 metric tons), but that adjustment is speculative.

Our best estimate is that roughly 12 to 13 metric tons of heroin are used in the United States during a

given year, and that the level of use has not changed appreciably during the last several years. (The

number of heroin users may have changed, because relatively inexpensive and high purity heroin may

have attracted occasional users, but occasional users account for a low proportion of heroin use.) The

level of use could be different, of course, but if it were much higher or much lower than 12 metric

tons then we could not account for production potential in South America and Mexico, all of which is

presumably exported to the United States.
16

The potential heroin production estimates have a variety of uncertainties due to the lack of detailed

country crop and processing data. The production process (the rate at which poppy is converted into

heroin) is only now being studied (or at least documented) for South America and Mexico. Our

research has depended on production estimates where the South American and Mexican production

processes are assumed to be the same as those outside the Americas. Of course there is room to be

critical of the consumption-based estimates as well. We cannot be sure of the number of hardcore

and occasional users, of the amount of money they spend on drugs, of the prices they pay and

consequently of the amount they use. Any one of the component parts of the estimates could be

wrong; perhaps all of them are wrong. The fact that the consumption-based estimates are so close to

the supply-based estimates is compelling but not convincing evidence that this heroin flow model

provides an accurate profile of how much heroin enters the United States, how it gets here, and where

it comes from.

Other domestic consumption estimates are available to the counterdrug community. The intelligence

community has estimated that, during the late 1990s, Americans used about 18 metric tons of heroin

per year. To get this estimate, the community accepted the ONDCP estimate of 980,000 hardcore

heroin users and assumed those users consumed an average of 50 mg per day. Use by occasional

users was apparently factored into these calculations, but the method is unclear.

This amount is considerably more than the 12 to 13 metric tons estimated in this report. The

intelligence community considers the 50 mg per day estimate to be conservative. Indeed, some

addicts can use much more as evidenced by consumption by opiate users who enter treatment. But

beyond this upper bound, the 50 mg estimate seems to have no justification beyond the assertion that

"Many analysts and treatment professionals, however, believe that 50 mg as the estimate for average

daily dosage for heroin users in the United States underestimates overall US market demand." Thus,

the 18 metric ton estimate would seem to rest on a shaky and unverifiable assumption.

This is not to say that the estimate from the intelligence community is wrong, of course. Nevertheless,

if we accept the estimate of 18 metric tons, we have to deal with some inconsistencies. Perhaps those

inconsistencies are ultimately resolvable, but surely they cannot be readily dismissed. For example, if

we are correct that a milligram of heroin costs roughly $1, then the implied $350 per week

expenditure exceeds our estimates of expenditures by hardcore users. As another example, the

estimates imply that 8 metric tons of heroin come from Colombia and 5 to 6 metric tons come from

Mexico. For reasons explained earlier, we doubt that Colombia can provide this amount of heroin

after accounting for seizures. Furthermore, even this high estimate of 8 metric tons is lower

proportionately than Colombia's apparent share of the heroin market. Mexico might be able to supply

this level, presuming production estimates are realistic, but for reasons stated, we think that Mexico's

production is overstated.
17

Table 8 - Summary of Calculations

1995 1996 1997 1998

Four Year

Average

Metric tons consumed: 11.4 12.4 13.1 12.5 12.3

Percentage from Colombia146.6 51.2 52.5 50.1 50.1

Percentage from Mexico226.4 26.1 22.8 25.1 25.1

Metric tons from Colombia25.3 6.3 6.9 6.2 6.2

Metric tons from Mexico33.0 3.2 3.0 3.1 3.1

Seizures:

Metric tons from Colombia40.75 0.75 0.75 0.75 0.75

Metric tons from Mexico40.24 0.25 0.48 0.32 0.32

Total consumption and seizures:

Metric tons from Colombia 6.1 7.1 7.7 7.0 6.9

Metric tons from Mexico 3.2 3.5 3.5 3.4 3.4

CNC Potential Production Estimates:

Metric tons from Colombia56.5 6.3 6.6 6.1 6.4

Metric tons from Mexico54.6 5.4 5.3 5.3 5.3

Efficiency Adjusted Productions Estimates 6

Metric tons from Colombia 7.0 6.7 7.1 6.5 6.8

Metric tons from Mexico 2.7 3.2 3.1 3.5 3.1

Source:

1. Table 1

2. Table 2

3. Table 3

4. See discussion on seizures.

5. International Control Strategy Report, March 1999

6. See discussion on efficiency adjustments.
18

Endnotes

 

1. Layne, M., R. Johnson, and W. Rhodes, “Estimating Cocaine Availability, ” Abt Associates

Inc., Cambridge, MA, December 1999.

2. Between 1994 and 1998, CNC reports that worldwide heroin production has ranged between

300 and 350 metric tons. Consumption in the United States in probably close to 12 metric tons,

suggesting that U.S. consumption is less than 5 percent of heroin produced worldwide. See Rhodes,

W., M. Layne, P. Johnston and L. Hozik, “What America’s Users Spend on Illegal Drugs, 1988-

1998.“ Report submitted to the Office of National Drug Control Policy by Abt Associates Inc.,

November 23, 1999.

3. Rhodes, W., M. Layne, P. Johnston, and L. Hozik. “What America’s Users Spend on Illegal Drugs:

1988-1998.” Report submitted to ONDCP by Abt Associates Inc., November 23, 1999.

4. Neither the Domestic Monitor Program nor the Heroin Signature Program provides

probability samples. Using those data sources as the basis for partitioning consumption by source

area requires mathematical modeling and statistical analysis. That approach is described in detail in a

report for the Drug Enforcement Administration: Rhodes, W., L. Truitt, R. Kling, and A. Nelson.

“The Domestic Monitor Program and the Heroin Signature Program: Recommendations for Changes,” Abt

Associates Inc., Cambridge MA, June 30, 1998. Calculations reported in this report, which were updated from

that earlier report, are available by request from the authors.

5. Use of the FDSS data does not imply that seizures accurately reflect the source area of heroin

entering the United States. For example, Mexican heroin seems to have a lower seizure rate

compared with heroin from the rest of the world. See W. Rhodes, et al., “The Domestic Monitor

Program and the Heroin Signature Program: Recommendations for Changes,” Abt Associates Inc.,

Cambridge, MA, June 30, 1998.

6. Much of the data used to estimate the number of hardcore users comes from the Drug Use Forecasting

System, a quarterly survey of arrestees conducted by the National Institute of Justice in twenty-four cities. The

DUF interview does not ask about “weekly” heroin use, but it does ask about the number of days that a

respondent used heroin during the month before the interview. Assumptions are that an answer of “more than

10 days ” means at least weekly.

7. Rhodes, W., M. Layne, P. Johnston, and L. Hozik, “What America’s Users Spend on Illegal

Drugs: 1988-1998.” Report submitted to ONDCP by Abt Associates Inc., November 23, 1999.

8. Johnston, P., W. Rhodes, K. Carrigan, and E. Moe, “The Price of Illicit Drugs: 1981 through

the Second Quarter of 1998.” Report submitted to ONDCP by Abt Associates Inc., February 1999.
19

 

9. Estimates pertaining to the late 1980s and early 1990s may be too low. The problem is that

heroin retail markets appear to be bifurcated with low purity heroin (suitable for injection) available

at relatively high unit price and high purity heroin (suitable for injection or snorting) available at

comparatively low unit price. The “retail” price is a mixture of these two prices. A special

addendum to the DUF data tells much about heroin purchase patterns in the middle and late 1990s,

but there are no comparable sources for earlier years. Consequently estimating heroin prices is more

uncertain for earlier years. Alternative ways of computing heroin prices lead to lower prices during

that early part of the study period. If we had adopted those lower prices, then the amount of heroin

consumed would have been correspondingly higher during those years. See W. Rhodes, S.

Langenbahn, R. Kling and P. Scheiman, “What America’s Users Spend on Illegal Drugs, 1988-

1995,” Office of National Drug Control Policy, Fall 1997.

10. The Domestic Monitor Program and the Heroin Signature Program are sometimes criticized

because they lack a probability sampling basis. A second criticism, frequently made, is that the

Domestic Monitor purchases are made mostly (but not exclusively) in open-air settings, so DMP

purchases may not represent all purchases made in the city. In a review for the Drug Enforcement

Administration, Abt Associates demonstrated how the data could be weighted and analyzed to reflect

purchases made across the country. The fact that purchases come mostly from outdoor settings

remains problematic, although agents interviewed by the Abt researchers felt that heroin sold in

indoor and outdoor settings did not differ. Details are provided in W. Rhodes, L. Truitt, R. Kling and

A. Nelson, “The Domestic Monitor Program and the Heroin Signature Program: Recommendations

for Changes.” Report submitted to the Drug Enforcement Administration by Abt Associates Inc.,

June 30, 1998.

11. Coomber argues that this dilution of imported heroin results from the heroin production process.

Thus purity probably varies from source area to source area. South American heroin appears to be the most

pure; Mexican is the least pure. Coomber, R., “The Cutting of Heroin,” Journal of Drug Issues, 29 (1), 1999:

17-35.

12. Calculations began with all the seizure reports contained in the Heroin Signature Program

data file. These reports are not comprehensive of all seizures at ports of entry, but we have no reason

to believe this is a biased sample of seizures. From this file we selected all reports where: (1) the

seizure occurred at an airport, at the border, or through the mail; (2) the seizure happened in 1995 or

later; and (3) the seizure involved less than ten kilograms. Each report was characterized by the

amount of pure heroin seized, and then the sample was weighted so that the distribution by source

country for the seizure data matched the distribution by source country for the consumption data. For

example, if 10 percent of the seizures came from South America while 15 percent of consumption

came from South America, we weighted the seizures from South America by 15/10 or 1.5. By source

area, the weights were:
20

 

0.73 for unknown

2.67 for Mexico

0.87 for Southeast Asia

1.32 for Southwest Asia

1.67 for South America

As a practical matter, then, this weighting gives much greater emphasis to Mexican heroin and

somewhat more emphasis to South American heroin.

13. Between 1995 and 1998, CNC estimated Colombia’s maximum production potential at 6.6

metric tons. It did not grow to 7.5 metric tons until 1999. Colombian authorities never seized more

than 0.15 metric tons during this period.

14. According to the 1999 INCSR, Mexican authorities have seized between 0.14 and 0.38

metric tons of heroin (or opium equivalent) every year since 1995. Given what U.S. authorities seize,

Mexican traffickers would seem to lose about 0.34 metric tons per year.

15. The Canadian Center on Substance Abuse reports that 5.9 percent of Canadians tried heroin

at some time; 1.1 percent of the population used heroin during 1994. Canadian Center on Substance

Abuse, Canadian Profile 1999 Illicit Drugs, downloaded from the Internet

www.ccsa.ca/cp99.11.htm, November 11, 1999.
21

APPENDIX A

Anaylsis to Determine Trends in Seizures at United

States Entry Points

Using seizures as a criterion, we sought to determine trends in the proportion of heroin that entered

the United States through different importation areas. Seizure locations were identified by State.

Tabulations showed that most heroin entered the United States through New York (including New

Jersey), Florida (including Puerto Rico), Texas (including Arizona), and California. Those four states

were identified as importation areas and seizures that did not occur in those four states were put into a

fifth residual category called Aother.@

We estimated the proportion of heroin entering these five importation areas using a multinomial

logistic model. Independent variables were time (coded 0 to 1), time squared, and time cubed. The

first regression was unweighted. The second was weighted by the amount of heroin in the seizure.

Seizures in excess of 50 kilograms were excluded from this analysis.

Results were plotted and reported in the main text.

===============================================================================

 LOGIT Version 3.1.2 11/01/1999 2:26 pm

===============================================================================

 Data Set: c:\ondcp\temp: Unweighted Data

-------------------------------------------------------------------------------

CASES PROCESSED BY LOGIT:

 8637 cases were kept out of 8637 in file.

DEPENDENT CATEGORIES ARE DESIGNATED AS:

 1 - OTHER

 2 - TEXAS

 3 - CALIFORN

 4 - FLORIDA

 5 - NEW YORK

DISTRIBUTION AMONG OUTCOME CATEGORIES FOR PLACE

 OTHER TEXAS CALIFORN FLORIDA NEW YORK

PROPORTION 0.1576 0.0864 0.1100 0.2294 0.4167

DESCRIPTIVE STATISTICS (N=8637):

 Mean Std Dev Minimum Maximum

 THE_TIME 0.5363 0.2878 0.0000 1.0000

 THETIME2 0.3705 0.3066 0.0000 1.0000

 THETIME3 0.2844 0.2957 0.0000 1.0000
22

ITERATION: 1 2 3 4 5

ESTIMATES FROM LOGIT ANALYSIS OF VARIABLE: PLACE

 Convergence after 5 iterations.

 Tolerance of 0.0000 achieved after 0.09 minutes.

 Logit Std 2-tailed Exp

 Variable Comparison Estimate Error t-value Prob Estimate

 -----------------------------------------------------------------------------------------------------------

 CONSTANT 1/5 -1.52930 0.1428 -10.71 0.000 2.1669e-001

 2/5 -2.06837 0.1819 -11.37 0.000 1.2639e-001

 3/5 -1.60172 0.1570 -10.20 0.000 2.0155e-001

 4/5 -3.43226 0.2147 -15.99 0.000 3.2314e-002

 THE_TIME 1/5 1.78009 1.1746 1.52 0.130 5.9304e+000

 2/5 0.92461 1.4932 0.62 0.536 2.5209e+000

 3/5 -1.69247 1.3248 -1.28 0.201 1.8406e-001

 4/5 14.11919 1.4688 9.61 0.000 1.3548e+006

 THETIME2 1/5 -1.90028 2.6301 -0.72 0.470 1.4953e-001

 2/5 0.34341 3.3345 0.10 0.918 1.4097e+000

 3/5 8.09904 3.0222 2.68 0.007 3.2913e+003

 4/5 -19.84582 2.9725 -6.68 0.000 2.4048e-009

 THETIME3 1/5 1.12434 1.6880 0.67 0.505 3.0782e+000

 2/5 -0.40195 2.1354 -0.19 0.851 6.6902e-001

 3/5 -6.36637 1.9706 -3.23 0.001 1.7184e-003

 4/5 8.86685 1.8022 4.92 0.000 7.0929e+003

MEASURES OF FIT:

 Test LRX2 df Prob

 ---------------------------------------------------

 Overall 481.8139 12 0.000

 CONSTANT 434.1462 4 0.000

 THE_TIME 101.6379 4 0.000

 THETIME2 62.2914 4 0.000

 THETIME3 44.3841 4 0.000

 -2 Log Likelihood for full model: 24530.9766

 -2 Log likelihood for restricted model: 25012.7904

 Percent Correctly Predicted: 41.6696

===============================================================================

 LOGIT Version 3.1.2 11/01/1999 2:26 pm

===============================================================================

 Data Set: c:\ondcp\temp: Weighted Data

-------------------------------------------------------------------------------

CASES PROCESSED BY LOGIT:

 8637 cases were kept out of 8637 in file.

WEIGHTING IS IN EFFECT:

 Computations have used the weight variable: WEIGHT

DEPENDENT CATEGORIES ARE DESIGNATED AS:

 1 - OTHER

 2 - TEXAS

 3 - CALIFORN

 4 - FLORIDA

 5 - NEW YORK

DISTRIBUTION AMONG OUTCOME CATEGORIES FOR PLACE

 OTHER TEXAS CALIFORN FLORIDA NEW YORK

PROPORTION 0.1367 0.0710 0.1254 0.2407 0.4262

DESCRIPTIVE STATISTICS (N=8637):
23

 Mean Std Dev Minimum Maximum

 THE_TIME 0.5354 0.2902 0.0000 1.0000

 THETIME2 0.3708 0.3108 0.0000 1.0000

 THETIME3 0.2861 0.3014 0.0000 1.0000

ITERATION: 1 2 3 4 5

ESTIMATES FROM LOGIT ANALYSIS OF VARIABLE: PLACE

 Convergence after 5 iterations.

 Tolerance of 0.0000 achieved after 0.10 minutes.

 Logit Std 2-tailed Exp

 Variable Comparison Estimate Error t-value Prob Estimate

 ---------------------------------------------------------------------------------------------------------

 CONSTANT 1/5 1.44806 0.1380 -10.49 0.000 0.2350

 2/5 -2.58411 0.2201 -11.74 0.000 0.0755

 3/5 -1.45229 0.1460 -9.95 0.000 0.2340

 4/5 -2.70859 0.1896 -14.28 0.000 0.0666

 THE_TIME 1/5 1.96781 1.1615 1.69 0.090 7.1550

 2/5 0.97534 1.7187 0.57 0.570 2.6521

 3/5 -2.26836 1.2266 -1.85 0.064 0.1035

 4/5 7.11160 1.3326 5.34 0.000 1226.1085

 THETIME2 1/5 -3.38102 2.6740 -1.26 0.206 0.0340

 2/5 3.10725 3.7586 0.83 0.408 22.3595

 3/5 9.32264 2.8024 3.33 0.001 11188.4644

 4/5 -4.57985 2.7501 -1.67 0.096 0.0103

 THETIME3 1/5 1.82091 1.7476 1.04 0.297 6.1775

 2/5 -3.07813 2.3749 -1.30 0.195 0.0460

 3/5 -6.98389 1.8220 -3.83 0.000 0.0009

 4/5 -0.21001 1.6832 -0.12 0.901 0.8106

MEASURES OF FIT:

 Test LRX2 df Prob

 -------------------------------------------------------------------

 Overall 550.2537 12 0.000

 CONSTANT 394.1137 4 0.000

 THE_TIME 38.5245 4 0.000

 THETIME2 20.5415 4 0.000

 THETIME3 19.7866 4 0.001

 -2 Log Likelihood for full model: 24089.4768

 -2 Log likelihood for restricted model: 24639.7305

 Percent Correctly Predicted: 42.6234

PREDICTED VALUES SUCCESSFULLY WRITTEN TO DISK:

 The file c:\ondcp was written with 8637 cases.

 The following variables are in the file:

 Prob Y=i for i=1 to 5 : P_OTHER P_TEXAS P_CALIFO P_FLORID P_NEW YO

 Dependent variable (Y): PLACE