Research Overview

My research interests lie broadly in applied microeconomics, primarily focusing on drug policy. The clandestine nature of illicit markets makes drug policy research especially challenging. To address these challenges, my work applies computational tools from computer science to quantify hidden market behaviors and assess drug policies’ broader social impacts. In addition to my focus on illicit markets, my work explores drug policy’s intersections with labour and social economics.

Working Papers

Heather Bone (2024). Kingpin Down: Power Vacuums, Market Structure, and the Violent Consequences of High-Profile Arrests (Job Market Paper)
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Abstract: This paper studies how targeting the top leaders of criminal enterprises impacts market structure and homicide rates in Mexico. While executive capture may diminish organizational capacity, it may also induce territorial disputes as the existing balance of power between organizations is disrupted. To empirically assess these competing theories, I build a new longitudinal dataset on the presence of criminal enterprises in Mexican municipalities, drawing from over 21 million newspaper articles. I train natural language models to extract (1) whether the article pertains to organized crime, (2) the names of criminal enterprises and locations mentioned in the text, and (3) which locations (if any) each criminal enterprise is operating in. I find that capture or assassination induces a 49% local increase in the number of criminal enterprises operating in these locations, reflecting the entry of competing groups to the geography. This market restructuring explains why a leader's capture or death induces a 32% increase in local homicides, suggesting costly repercussions associated with the policy.

Heather Bone (2020). Detecting Unobserved Drug Smuggling Using Export Data: Evidence from Peru
Available Upon Request

Abstract: This paper develops a method through which to detect unobserved drug smuggling using transaction level export data. Exploiting a positive supply shock to the Peruvian cocaine market from coca eradication policy in Colombia, I study the impact of an exogenously induced increase in coca prices on the value of exports from Peru, as drug traffickers commonly use other goods to conceal cocaine shipments. Using variation in Colombian coca production to predict coca leaf prices, I estimate that a $1USD/KG increase in the farm gate price of coca leaves lead to a 248% increase in the value of exports from Peruvian provinces that are highly suitable to grow coca to countries identified by intelligence agencies as cocaine transit countries. Additionally, I find evidence that characterizes drug traffickers as sophisticated agents who reduce the risk of arrest or seizure through their selection of shipping methods. I discuss the importance of these results in the context of global drug policy and provide a scope for future work.