While you're absolutely correct in the price aspect and where it comes from, I read an article last year that tested the purity levels in heroin from major cities around the country and New Orleans had the highest in the country at just under 40%.
My first thought to Guido's second question about economics was purity.
I wrote a paper in college on the heroin epidemic among US soldiers in Vietnam. They were getting heroin with purity north of 90% there and street heroin in the US is typically in the range of 10 to 15%.