In a recent story, the Drug Enforcement Administration claimed to have seized 14 kilograms of cocaine worth about $7 million {Metro, Oct. 21}. This story illustrates the long-standing and highly misleading practice of measuring drug seizures in terms of the retail or street prices of confiscated drugs. There is no logical basis for using these prices to measure seizures. This practice seems designed merely to exaggerate and sensationalize the impact of enforcement efforts.

To claim that $7 million worth of cocaine was seized from drug traffickers is to imply that the dealers suffered a $7 million loss. This is false. That figure merely represents the gross sales potential of the seized cocaine once it has passed through many hands and ultimately reached the consumer.

The correct measure of the economic impact of a drug seizure is replacement cost -- what it will cost the drug cartel to buy an equal amount of cocaine. For major traffickers, the cost of replacement is the wholesale price, not the retail price. According to the DEA's own estimates, the wholesale price of cocaine this year ranges from $20,000 to $40,000 per kilogram. Accordingly, even if the price were $40,000, the 14 kilograms recently confiscated could be replaced for $560,000. Thus, the DEA exaggerated its achievement by more than 1,000 percent.

Using retail price to measure a drug seizure may also create a false impression that a particular number of retail transactions have been prevented by the seizure. When an oil tanker sinks or a truckload of fish is ruined by a refrigeration failure, the consumer barely notices. The same is true in the illegal-drug business. Cocaine users will still get their drug, perhaps paying a slightly higher price. But in recent years, the price of cocaine has not increased. In fact, the price of cocaine has been declining throughout this decade.

To allow the public properly to evaluate the impact of future drug seizures, drug enforcement officials should disclose the replacement cost of seized drugs, not their retail value, and should be required to state what effect, if any, their seizures will have on retail drug prices. JAMES OSTROWSKI Harrison, N.J. The writer is vice chairman of the Committee on Law Reform of the New York County Lawyers Association.