These facts about the price elasticity of demand mean that high taxes on cigarettes and alcohol limit the number of young people who become habitual users of these products, but high taxes have only a modest effect on the quantities consumed by established users.

Similarly, effective policing of imports of an illegal drug that limits its supply leads to a large price rise and a substantial decrease in the number of new users but only a small decrease in the quantity consumed by addicts. Expenditure on the drug by addicts increases. Further, because many drug addicts finance their purchases with crime, the amount of theft and burglary increases.