I read it's about 30 billion. But I read there were 6 million users in 1985. Let's say he gets 10 percent of the sales price, it means each person paid 50000 dollars for cocaine. It sounds way too much. Any calculations how they reached this amount?
Not sure an economist can answer this particular question about Escobar's wealth and not only because all the given estimates are uncertain. A more interesting question for an economist (or at least for me) would be: What is Escobar's (a drug firm) mark-up? Or what is the economic size of the international market for cocaine?
The most serious source of information I was able to find is the 2012 World Drug Report of the United Nations Office on Drugs and Crime (UNDOC). UNODC estimates suggest that
- The total retail market for cocaine amounts to some US $85 billion in 2009 (p.70).
- Columbian production proxied in terms of hectares is around 89% (based on 2009's estimates (68,000+73,000)/158,800 - Table 12).
So, if you assume that all Columbian production is produced by Escobar's cartel his total benefit is about USD $75 billion for the year 2009.
Edit: However, we cannot assume that Escobar's cartel got 89% of the retail value (thanks to @Alecos Papadopoulos for this point). The USD 75 billion is the equivalent of the "box office" for a movie - but the producers of the movie (i.e. Escobar's cartel) do not get all the box office.
Then, the question is what is the proportion retained by the Escobar's cartel? I have no clue! However, Levitt and Vetakesh QJE paper document that "earnings within the (drug) gang are enormously skewed (..) with high-level gang members earning far more than their legitimate market alternative." So, by extrapolating from this result and assuming that the drug market is vertically integrated and controlled by the Escobar's cartel, we may speculate that the latter (and Escobar himself) may get a big part of the box office.
In this report, you may also find more reliable estimates about
- The total number of cocaine users: 16 million (Table 7)
- and the estimates per region.
- Purity-adjusted prices per gram in those regions
So if you find some data on consumer's average consumption and Escobar's production you may get a better estimate of his wealth.
I didn't go through all that thinking and analysis as I see in this post, but while watching Narcos (both seasons so far), listening to the narration it seems the drug business is really just a logistics business, the value lies in insuring that the end user gets the product all cost even in human casualties.Every possible cost is factored into that value, so if you the manufacturer control every aspect of the supply chain, including insurance on the product. You can have a mark up as high as you want 1000%, 5000% if you want. Target a market that has the cash to burn, literally like the US or some specific areas of it, it really is that simple to be extraordinarily wealthy.