of the seized drugs is substantially less than the landed price, so high seizure rates have modest effect even on wholesale prices.<sup>21</sup> This contrasts sharply with street level dealing, where the risks of arrest and incarceration can be spread over only the few grams that the dealer sells (see Caulkins and Reuter, 1998 for a discussion of these issues).

Heroin smuggling appears to be less efficient than cocaine smuggling, at least as measured in dollars per kilogram. Heroin that exits Afghanistan at $1,000 per kilogram (in bundles of ten kilograms or more) sells on arrival in the United Kingdom for $50,000 per kilogram.<sup>22</sup> There have been a few multi-hundred kilogram shipments of heroin but they are very rare compared to those for cocaine. The drug often travels in small bundles that are swallowed (typically wrapped in condoms) by individual couriers.<sup>23</sup> “Body-packing,” where the couriers are low wage earners, produces per kilogram smuggling costs of less than $10,000 in the United States. A body-packer can apparently carry about 3/4 of a kilogram. A payment of $5,000 for incurring a 1 in 10 risk in prison (perhaps acceptable for couriers whose legitimate wages are only about $2,000 per annum), along with $3,000 in travel expenses, produces a kilogram smuggling cost of just over $11,000 compared to a retail price of $500,000.<sup>24</sup> The remainder of the smugglers' margin is for assuming other kinds of risk.<sup>25</sup> Importantly, smuggling costs depend on the ability to conceal drugs in a flow of legitimate commerce and traffic. Colombia and Mexico serve as the principal smuggling platforms to the United States in part because they have large immigrant populations in the United States and extensive air traffic and trade.<sup>26</sup> Though Mexico is a high cost producer, farm-gate prices for opium in Mexico being typically $2,000 to $5,000 per kilo, compared to less than $50 in Afghanistan prior to 2001, the low smuggling costs equalize total landed price. Colombia, a new

> 21 This is not an argument for abandoning interdiction but for recognizing the limits of its effectiveness in making cocaine or heroin more expensive and less available in mature markets.

> 22 It is the absolute difference between export and import that measures smuggling efficiency. However for purposes of final consumption, the absolute price difference is not the interesting figure here; heroin doses are much smaller than those for cocaine (25-50 pure milligram vs. 200 pure milligrams).

> 23 Nigerian traffickers seem to specialize in such smuggling.  Mark Kleiman (personal communication) has estimated that Nigerian couriers body-packing heroin into New York in the early 1990s accounted for over 500 kilograms per annum, 3 to 5 percent of estimated U.S. consumption. That requires only three body packers every two days.

24 The risk and payment figures here are moderately informed guesses; the purpose is simply to provide a sense of the magnitudes involved.

25 The body packer costs are much lower for exports to Russia from Central Asia; body packers in Tajikistan may receive only $500 for smuggling heroin. Russia seizes very little heroin and the opportunity cost of the smugglers in terms of legitimate wages is no more than a few hundred dollars per annum. It is particularly difficult to explain the high mark-ups for smuggling heroin in to Russia.

26 The 2000 U.S. Census counted 9 million residents born in Mexico. The figure for Colombia was only 600,000 but this was twice as many as for any other South American nation.

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