Spatial Competition in Illicit Drug Markets: The Consequences of Increased Drug Law Enforcement

This paper explores the impact of increasing drug enforcement on the violent crime rate in the context of spatial competition in illicit drug markets. Violence is an important aspect of competition in illicit markets because disputes cannot be resolved in the courts. A model of spatial competition suggests higher drug enforcement in one jurisdiction will increase the size of the drug market in an adjoining jurisdiction, resulting in a higher violent crime rate. Data from Florida jurisdictions suggest that geographic spillovers of violent crime result from law enforcement differentials and imply that they are much larger than those found in studies of property crime.