Breaking Drug Trafficking Chains the Real Name Mailing Regulation and the Decline of Drug Use

Postal service has become an important channel for drug trafficking worldwide. This paper examines the impact of the real-name mailing regulation on drug use in a Chinese province. Based on the universe of drug arrest, the difference-in-differences analysis shows that after the implementation of this regulation, on average, a town with 10 percent more courier services penetration exhibits a 0.78 percent reduction in drug arrest. This effect persists for at least a year. We exploit the early development of the courier service industry and use the early mulberry tree planting status as the Instrumental Variable for the courier service penetration today. We find no evidence that police activities change or drug users substitute alternative substances. Further analysis shows that only the number of new drug users diminishes. We suggest that this regulation on courier service companies is likely to be a cost-effective method to decrease the supply of drugs