In a recent report prepared by the news firm Bloomberg and termed the Bloomberg Vice Index, you can spend as little as $41.40 in Laos and a whopping $1,441.50 in Japan for indulging in a weekly habit of drugs, booze and cigarettes.
In the United States, the fix of the vices adds up to almost $400, or about a third of the weekly income, the index finds after it compared the price of a basket of goods — tobacco, alcohol, amphetamine, cannabis, cocaine and opioids — in more than 100 countries relative to the U.S.
The cheapest prices can be found in Congo, Honduras and Laos in terms of absolute costs. Japan is the most expensive with New Zealand and Australia right behind on the other end of the scale. For all of 18 countries that are emerging or frontier markets from Peru to Cambodia, a market basket runs below $100. The Golden Triangle of opium-producing region of Asia is close geographically to many of these places.
“It’s all about distribution costs,” said Peter Reuter, a professor in the School of Public Policy and the Department of Criminology at the University of Maryland. “Being closer to the producer lowers costs.”
Along with data from the World Health Organization, the annual World Drug Report published by the United Nations and Bloomberg’s own mined research were used to produce the report. 2016 gross domestic product data was used for calculations of wages. Surveys in this field suffer from a time lag and data collection is hard. The index doesn’t track prostitution and gambling and is not an endorsement of tawdry or illegal behavior.
Insights into the economics behind some our bad habits are given by
The Bloomberg Vice Index. Law enforcement, for example, is critical in determining drug prices.
In a government clampdown in the Philippines, thousands of drugs users and dealers have been slaughtered. For being caught with a small stash of marijuana, there are cautionary tales of backpackers thrown in jail to face a death sentence in Thailand.
“Illegal drugs prices will of course have a premium that reflects local zeal for enforcement,” said Philip J. Cook, professor at the Sanford School of Public Policy at Duke University. “The same can be said for the heavily taxed legal commodities, since the street price may be dominated by smuggled goods.”
And more of a reflection of local taxes is the prices for alcohol and tobacco.
“Low-income consumers may prefer to smoke Marlboros and drink Heineken, but substitute what they would consider inferior brands that are cheaper,” Cook said. “Low income countries have low prices for the most used brands because that’s what the consumers can afford.”
A few surprises are unveiled by looking at the basket of vices relative to income. The best value is offered by high-income nations such as Luxembourg and Switzerland under that criteria. On the other hand, locals would have to spend 17 times their weekly wages for a bottle of beer, a packet of smokes and a gram of cocaine in Venezuela due to rampant inflation.
(Adapted from Bloomberg)