EARLIER this month the Irish Timesreported that the country's illegal drug market had collapsed:

After 15 years of market growth…[dealers] were finding it harder to sell drugs, as pay cuts, tax rises and job losses left recreational users with less money. The Irish gangs were unable to shift larger hauls and, in any case, lacked the resources to buy in bulk, so they were ordering smaller quantities. This liquidity crisis was an unfamiliar problem for criminals used to having a river of money at their disposal.

User arrests are down by 20% in recent years and the value of drugs seized—used as a proxy for market size—has hit 15-year lows. This demand elasticity is evident in both hard and soft drug markets: the value of cocaine seized last year is less than half that of previous years, marijuana's a tenth of its 2006 peak. Even heroin junkies have economised; the value of seized heroin has fallen more than 85% since 2008.

While one can quibble with this analysis (for reasons described below), it suggests that most Irish drug users aren't addicted automatons; with less disposable income, many seem to have quit or reduced their drug use. Even if the changes are only directionally correct, it highlights the "Reefer Madness" fallacy of treating drug users as mindless addicts.

In some ways, however, this could be good news for the war on drugs. The war is, in part, predicated on the idea that law enforcement can deter drug use by raising street prices. If demand is price sensitive, the war will have done more to reduce the number of users. (Of course, such sensitivity would also imply that taxation could be a powerful deterrent if countries listen this newspaper and legalise drugs.)

Unfortunately, alternative explanations for the observed effects muddy this analysis. The fall in drug seizures, for example, could be a result of police budget cuts or improved trafficking methods rather than a reduction in quantity consumed. And annual seizures of some drugs, like amphetamines, had been falling before the economic crisis, so at the very least there are other variables at work as well.

Even the implied causality behind the market decline isn't entirely clear. The Irish Times focuses on a fall in consumer demand, but also suggests that supply problems could be to blame ("we did see a drought in heroin…a long one, the first we'd seen in a good while").

Intuitively, the supply-side explanation doesn't seem plausible. Although it's possible that a liquidity crisis would cause supply chain hiccups, drug markets should be deep enough—still worth millions annually even after the slump—to avoid such sustained breakdowns. If anything, supplies should be more resilient and less affected by individual seizures if dealers have been forced to bring in smaller, more frequent shipments.

Questions like this could be answered by looking at drug price trends—falling prices would imply a demand, not supply, shortfall—but, oddly, the piece makes almost no mention of prices. Understanding such trends would also show how much of the fall in value of drug seizures has been driven by a decline in quantity confiscated rather than price changes.

I'm not an expert on Irish drug statistics—readers, please point me to further reports on this issue—but I imagine that Irish Times didn't go into pricing because the data simply aren't available. Even in America, which has some of the most in-depth national drug use and price surveys, econometric market analysis has been handicapped by data limitations. Other countries, including Britain, put little effort into collecting such data. It's a missed opportunity not just to improve drug policymaking through rational cost-benefit analysis but also to inform law enforcement efforts.

In Ireland's case, such econometric analysis would cast light on the future of the country's troubled drug market. So far, despite the apparent fall in demand, dealer arrests have only declined by 2%. This suggests that the same number of suppliers are chasing fewer buyers, setting the stage for a price war. If that's true, Irish gangs—like its mainstream retailers—can look forward to painful structural adjustment, bankruptcies and business failures.