ties of 5 gm or less, and 32 percent recorded only 1–9 such purchases. Only 6 percent of field offices recorded more than 50 purchases of cocaine base, and only 2 percent recorded more than 50 purchases of quantities of 5 gm or less. These statistics vary somewhat among years and forms of cocaine (powder cocaine and cocaine base), but the message they convey remains the same. It is that in any given year, STRIDE contains little or no information about the price of cocaine, especially the price of retail quantities, in most of the geographical areas covered by DEA field offices.

The sparseness of the STRIDE data limits their usefulness for constructing price indices. There are few cities in which there are enough records of purchases to make precise estimates of prices and price functions, especially for retail quantities. One way of dealing with this problem is to construct price indices only for the few cities for which STRIDE contains relatively large numbers of observations. Many policy studies, however, have used STRIDE to construct a price index for the nation as a whole by pooling all of the STRIDE price data for a given time period. Such a procedure would be acceptable if the price functions of interest were the same in all regions of the country and for all forms of cocaine. As discussed later, however, prices recorded in STRIDE differ greatly among cities and forms of cocaine.

Some studies have attempted to compensate for these differences by allowing the levels of the price functions of different cities to be different. That is, the price functions in different cities are assumed to be parallel lines or curves. Some studies also assume that the distances between the price functions of different cities remain constant over time. However, price functions estimated from STRIDE data have different shapes in different cities and for different forms of cocaine, and the distances between different price functions change over time. Compensating for different shapes as well as variations in levels over time requires estimating a different price function for each city and form of cocaine in each year, but this is not possible because of the small number of observations in STRIDE for most cities. Thus, the STRIDE data can be used to construct a national price index for cocaine only by assuming that price functions in different cities are similar in certain ways—but the STRIDE data can be used to show that the required assumptions are false.

The characteristics of the STRIDE data vary greatly among the cities in which the number of observations is relatively large. The characteristics also vary among years within these cities. The figures and table that follow illustrate this variation. Figure A.1 shows year-to-year variations in the numbers of recorded purchases of cocaine base in four cities. Until