Survey Evidence on Black Market Liquor in Colombia

In 2014, the Colombian Government commissioned a unique national survey on illegal liquor. Interviewers purchased bottles of liquor from interviewees and tested them for authenticity in a laboratory. Two factors predict whether liquor is contraband (smuggled): (1) the absence of a receipt and (2) the presence of a discount offered by the seller. Neither factor predicts whether a bottle is adulterated. The results back a story in which sellers are complicit with a contraband economy, but whether buyers are complicit remains unclear. However, buyers are more likely to receive adulterated liquor when specifically asking for a discount.