Thursday, August 28, 2014

The market for marijuana in Washington State, prior to legalization.

A RAND report assesses the marijuana market in the State of Washington prior to the legalization of marijuana through Initiative 502. Among the key findings are that consumption was estimated at over 120 metric tons annually, and that King, Snohomish and Pierce counties are happening places.


Before the Grand Opening: Measuring Washington State's Marijuana Market in the Last Year Before Legalized Commercial Sales

by Beau Kilmer, Jonathan P. Caulkins, Gregory Midgette, Linden Dahlkemper, Robert J. MacCoun, Rosalie Liccardo Pacula

Research Questions: What is the size of the marijuana market of Washington state in 2013?  How much marijuana do users in Washington consume and how to they obtain it?

Abstract: In 2012, Washington state voters passed Initiative 502 (I-502), which removed the prohibition on the production, distribution, and possession of marijuana for nonmedical purposes and required the state to regulate and tax a new marijuana industry. Legalization of possession went into effect almost immediately, but the revolutionary aspect of the law — allowing businesses to openly produce and distribute commercial-scale quantities for nonmedical use — is expected to be fully implemented in 2014.

...This report estimates the total weight of marijuana consumed in Washington in 2013 using data from existing household surveys as well as information from a new web-based consumption survey. Although the principal motivation for the study was estimating the size of the market, the report also describes various characteristics of the market, including traits of marijuana users in Washington and how they obtain marijuana.

While the Washington Office of Financial Management projected that 85 metric tons (MT) of marijuana would be consumed in the state in 2013, this report suggests that estimate is probably too low, perhaps by a factor of two. There is inevitable uncertainty surrounding estimates of illegal and quasi-illegal activities, so it is better to think in terms of a range of possible sizes, rather than a point estimate. Analyses suggest a range of 135–225 MT, which might loosely be thought of as a 90-percent confidence interval, with a median estimate close to 175 MT.

Key Findings

Marijuana consumption in Washington in 2013 is larger than the 85 metric tons (MT) previously projected by the Washington Office of Financial Management.
Even before adjusting for survey undercounting, our estimates suggest a 90-percent confidence interval of approximately 120–175 MT. The difference is largely driven by our use of more recent data.

It is difficult to know by how much surveys understate actual consumption.
Many of the relevant studies were published over a decade ago and times have changed; the NSDUH methodology has been improved substantially, and a national increase in marijuana use over the 2000s may have influenced willingness to self-report.
It is also unclear how applicable national and regional studies are to the state of Washington. After reviewing the evidence and attempting to adjust for undercounting, results from our simulation suggest consumption likely falls within the interval of 135–225 MT, with a median estimate close to 175 MT.

Three counties account for about 50 percent of marijuana users in Washington.
King County accounts for about 30 percent of the marijuana users, while Snohomish and Pierce counties each account for roughly 11 percent.

The literature is surprisingly thin concerning how much marijuana users consume during a typical day of use.
That general deficit becomes all the more acute when focusing on a particular jurisdiction and time, such as Washington in 2013. The emphasis has traditionally been on counting users, not counting grams.
However, by augmenting that thin literature with data from the web-based consumption survey developed by RAND, we estimate that Washington residents who use marijuana 21 or more times per month consume, on average, 1.3–1.9 grams during a typical use day.

Multiple datasets provide information about the potency of the marijuana consumed in Washington.
None is ideal, and there is no way to take a random sample of the universe of marijuana that is sold or consumed. But the available information suggests that lower-potency forms account for only a modest share of the Washington market and probably a smaller share than they do nationwide.

Wednesday, August 27, 2014

Surrogacy in Thailand

The NY Times discusses the market for surrogate child birth in Thailand, and possible new legislation making it illegal to pay for surrogacy:
In Thailand’s Surrogacy Industry, Profit and a Moral Quagmire

"PAK OK, Thailand — Soon after the first surrogate mother from this remote village gave birth, neighbors noticed her new car and conspicuous home renovations, sending ripples of envy through the wooden houses beside rice paddies and tamarind groves.
...
"In the two years since, carrying babies for foreigners, mainly couples from wealthier Asian nations, quickly became a lucrative cottage industry in the farming communities around Pak Ok, a six-hour drive from Bangkok. Officials say at least 24 women out of a population of about 13,000 people have since become paid surrogate mothers.
...
"The baby boomlet here was just one of several bizarre and often ethically charged iterations of Thailand’s freewheeling venture into what detractors call the womb rental business, an unguided experiment that the country’s military government now says it is planning to end.

"Commercial surrogacy has been available for at least a decade in Thailand, one of only a handful of countries where it is allowed, and one of only two in Asia, making it a prime destination for couples in the region from countries where the practice is banned.

"Officials estimate that there are several hundred surrogate births here each year, a number that does not include foreign surrogates, including many hired by Chinese couples, who come to Thailand for the embryo implantation then return home to carry out the pregnancy.

"But a pair of recent scandals have focused scrutiny on the largely unregulated industry, raising ethical questions and prompting the government’s crackdown.
...
"More recently, police raids on surrogacy clinics in Bangkok uncovered the case of a Japanese man who had fathered around a dozen babies through surrogates — the exact number is not known — whose births were only weeks or months apart. Last week the global police agency, Interpol, said it had begun an investigation into the motives and background of the Japanese man.

"Commentators have lamented that Thailand, which already had a reputation for prostitution, was now becoming, as one television anchor called it, the “womb of Asia.”

"Others described surrogacy as the exploitation of the weak and poor by wealthy couples from more developed nations.
...
"Thai officials say surrogates are paid about $10,000 for a successful pregnancy, more for twins, in addition to a monthly allowance of around $450 and free lodging in Bangkok, where the women are either instructed or choose to carry out their pregnancies.
...
Among the villagers, there is sympathy for the surrogates and anger at what is seen as a witch hunt by the authorities for women who took part in a practice that is not yet illegal.

“There’s nothing wrong with surrogacy — you are helping people who can’t have a baby,” said Pakson Thongda, 42, whose daughter twice sold eggs to a fertility clinic for about $1,000 each time. “I understand the feeling of a mother who really, really wants a child.”

"The surrogacy business in Thailand has provided a low-cost alternative to the United States, the world’s largest paid surrogacy destination, and was an outgrowth of the country’s effort to promote itself as a destination for medical tourism. The Thai industry also benefited from regulations in India, which prohibit same-sex couples from hiring surrogate mothers. India is the only other Asian country where surrogacy is legal.

"Commercial surrogacy has operated in a legal gray area. There are no laws banning it, but there are some hurdles. Thai law defines a mother as the person who gives birth, so in order for the biological parents to gain custody, the surrogate mother must renounce her parental rights — a concession that may require legal wrangling.

"The police investigations and the pending law have left a number of foreign couples wondering whether they will be able to bring their surrogate babies home. One Australian couple, unable to complete the legal procedures for twins born in July by a Thai surrogate, have been raising funds on the Internet to help pay for the legal costs.

"The authorities in Australia have requested that the Thai junta allow “transitional arrangements,” before the law banning commercial surrogacy comes into effect.

"The law, which the junta has vowed to pass soon through its rubber-stamp Parliament, would still allow surrogacy, but without payment. Surrogacy brokers and advertising offering surrogacy services would be banned.

"The junta has not publicly explained its decision, but Sriamporn Salikoop, a senior Supreme Court judge, said the ban was needed to prevent exploitation of Thai surrogates."

Tuesday, August 26, 2014

Non-directed kidney donation up in Britain

The Telegraph has the story: Why I wanted to donate a kidney to a complete stranger

"Altruistic kidney donation has, in the past year, increased by 55 per cent, with 118 living people donating a kidney. The practice only became legal in 2006, and the following year only six procedures were recorded. Since then the numbers have risen exponentially.
Transplant experts believe that cases such as that of the 85-year-old woman who this year became Britain’s oldest living kidney donor – “Why do I need two kidneys to sit at home knitting and watching television?”, she asked – have inspired others to follow suit.
Before 2006, only family and close friends were allowed to give up their kidney for people suffering from kidney dysfunction. The authorities were wary of a trade in organs that could lead to an exploitative or coercive relationship between recipient and donor.
The current legislation, drawn to prevent this, states that donors are not allowed to know the identity of the recipient, although recipients are allowed to get in touch with donors, if they choose to, after the operation. This is so that the recipient is not made to feel any moral or financial obligation.

Monday, August 25, 2014

Repugnant markets and forbidden transactions: video of my talk at Lindau

Here's a 30 minute video of my recent lecture at Lindau, on Repugnant Markets and Forbidden Transactions

 

Market design (and kidney exchange) as an example of the uses of economics | 2 minute video from Lindau

Market design (kidney exchange in particular) as a useful part of economics, in 2 minutes, from Lindau.

Sunday, August 24, 2014

Matching markets, and repugnant transactions | 3 minute video from Lindau

Here's a 3 minute video from the Lindau meetings, about matching markets, and repugnant transactions. (Next blog post will be from home in CA...)

Saturday, August 23, 2014

Debate on kidney markets in the NY Times

How Much for a Kidney?

INTRODUCTION

kidney transplantsAccording to the World Health Organization, 80,000 kidney transplants are performed worldwide each year. Nicole Bengiveno/The New York Times
The demand for transplantable organs far exceeds the supply. That has led to an increase in the illegal trafficking of kidneys, which represent the majority of living-donor transplants because a person can live with only one.
Should people in need of a kidney transplant be allowed to pay someone to donate one of theirs, or would that let the rich exploit the poor?
READ THE DISCUSSION »

DEBATERS

Friday, August 22, 2014

Banning trade in ivory: two stories about enforcement in the U.S.

The NY Times has a story on the new NY law on ivory: Battling the Ivory Trade

"New York’s Governor Andrew Cuomo on Tuesday signed one of the toughest laws in the nation banning the sale of elephant ivory and rhinoceros horns as a “stand against a dangerous and cruel industry.”

The new law, which goes into effect immediately, was written to protect elephants that are being slaughtered at the rate of 96 a day in Africa. If it works as intended, the flow of ivory into New York — often ranked the number one importer of ivory in the United States — should soon slow to virtually nothing.

In the past, traders have found a way to get around bans, often by simply providing fraudulent paper work. But the new law is much stricter. New York will not allow trade in anything but 100-year-old antiques with small amounts of ivory (and documented proof of provenance), musical instruments made before 1975, pieces used for education or scientific purposes such as museums and items handed down through estates.

Even more important, the law dramatically increases penalties for those caught trading in these products. "
***************

Sometimes enforcement leads to silly incidents: Teens' Bagpipes Seized at US Border Over Ivory

"Campbell Webster, of Concord, and his friend Eryk Bean, of Londonderry, were returning from Canada on Sunday after a bagpipe competition that served as a tuneup for the world championships in Glasgow, Scotland. The 17-year-olds, fresh off winning several top prizes in Canada, got to a small border crossing in Vermont when they were told they'd have to relinquish their pipes because they contain ivory.

The U.S. prohibits importing ivory taken after 1976. Even though the boys had certificates showing their ivory is older — Campbell's pipes date to 1936 — U.S. Customs and Border Protection seized the pipes in Highgate Springs, Vermont. Well, not all of them: The boys took every other part possible and left the ivory with Border Patrol so nobody else could make a full set out of the parts.

"This has been an awful headache," said Lezlie Webster, Campbell's mother. "At one point at the Canadian border, they said, 'no way are we going to get our pipes back.'"

After contacting New Hampshire's congressional delegation and gathering more than 3,000 signatures on an online petition, the boys are getting their pipes back and were set to fly from Boston to Scotland on Tuesday. But the hassle is lingering like a sour note: Lezlie Webster said the boys had to shell out $576 in extra fees because they took the pipes across the border at a "non-designated crossing.""