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Drop is measured from the top of the shank down. So pretty much you measure from the top of the pin ( Which inserts into your hitch) to where the ball mounts.
i have a 3" suspension lift on mine and a 2" drop reciever seems to do fine for me. could go lower but i opted to keep ground clearance. i get no binding or anything that i can tell while towing my little trailer around.
I don't think the info given from each member would be of any value unless you happen to have the same trailer being pulled. For instance, I have a stock height 2002 SLT+ and due to the fact that my trailer sits higher I actually have to use a 1/2" rise to level everything out. Just my $0.02 worth.
I know brordo. But a quick parking lot survey (comparing my knee to hitches) and a walk through a trailer sales lot told me that a 2" or 3" drop is fine for most things I will be pulling.
Thanks for the reply,
Kevin