Whither the Price of Party Pills? A Guest Post

A story on the Internet noted that New Zealand is banning the so-called party pill, a stimulant that is already illegal in the U.S. The ban goes into effect April 1. Sales after that date are outlawed, and possession will be illegal after October 1.

The fines on sellers after April 1 will no doubt cause a decrease in supply, and prices will rise while the quantity sold falls; but what will happen to prices before then?

Sellers need to unload their soon-to-be-illegal stocks of the pills, and the short-run increase in supply that results will drive prices down. But pill consumers, knowing the price will eventually rise, will want to buy now when the pills are still available, causing a short-run increase in demand. I would bet that sales will be very brisk in the next three weeks — there will be a lot of exciting parties in New Zealand! But whether prices will be above or below the level they were at before the ban was passed is unclear.

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  1. anon says:

    What about the price of waffle irons? The supply of waffling just increased.

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  2. Christopher D. Butler says:

    I think the party pills will decrease in price due to a larger decrease in demand. The appeal of these pills was the convinience and legality. Once those factors are taken away, I think the marginal utility of the pill compared to other illegal drugs will be very small.

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  3. Ben says:

    Because prohibition works so well… One has only to look as far as the united states failed attempt at banning alcohol and our current “war on drugs” to see how not only will use not fall but violent crime rates will increase.
    As far as effects of the supply there will probably be a brief spike in price once the law takes effect. The supply however will no longer be regulated so suppliers instead of being government monitored will now cut corners to produce more product (not washing away dangerous impurities, adding other substances that are cheaper to give the same effect, etc) and the market for BZP in New Zealand will probably act like the market for MDMA in the United States and Europe.

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  4. Roman says:

    They stayed awake in economics. Got to love well educated consumers.

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  5. Matt says:

    This is, of course, an empirical question. But my guess is that demand will outstrip supply and the price will rise. Time will tell…

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  6. MikeE says:

    The raw ingredient is being bought up in large quantities by the gangs. BZP is a crap substance though, and likely consumers will switch to meth (more harmful) or MDMA (better high, less comedown etc).

    Worth noting that 26 million have been sold in NZ without a single death. Try saying that about alcohol which is responsible for 3% of male deaths here.

    This ban wasn’t based on evidence, but drug snobbery.

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  7. Morton says:

    The only reason BZP is popular in NZ is that MDMA is very very pricey. If people switch from BZP to anything it will be Meth (also very cheap).

    However, NZ gangs should be able to supply cheap BZP pills so it will likely continue to be popular even though it’s a poor mans MDMA.

    It’s a shame the government has gone down this path.

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  8. Daniel says:

    I can give you first hand information on these, being a part owner of a website that sells party pills, yousorted.com.

    We’ve seen an increase in sales over the last week, but has spiked and now dropped below normal sales. Rather then the industry being regulated in New Zealand, gangs will just have some new products to sell which will contain other not so safe ingredients marketed as “party pills”.

    It will be an interesting process to watch, I can’t see any positives coming out of banning party pills. Just a whole lot of young people in New Zealand, turning to mdma and p based drugs as nothing safer will be available to them.

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