Letter: Economic modelling of the gateway effect

Abstract

Although a significant number of empirical studies provide evidence of sequencing in drug use, economic theory remains focused on addiction to a single substance. This paper presents a general model of substance use that allows for the possibility of multi-commodity habit formation and can be used to analyse the intertemporal relationship between the consumption of legal and illicit drugs, or the gateway effect. A simple two-drug model is analysed and conditions for the existence of multi-commodity habit formation are examined. It is found in the case of multi-commodity habit formation that the marginal utility of initiating a new drug is higher when there is prior consumption of the other drug. Further, it is found that the individual will initiate drug consumption with that drug that has the lowest marginal cost. The particular sequencing of drug use that is observed in empirical data is explained by differences in the marginal cost of consuming legal and illegal drugs.

Cigarette Taxes and Teen Marijuana Use

“…Understanding the general equilibrium effects of substance use policies is critical for optimal tax design (Pacula 1997 Notes: Each column represents average marginal effects from a logit regression based on data from the YRBS for the indicated period. All models control for the covariates listed in Table 1, state fixed effects, and year fixed effects.…”

“…Understanding the general equilibrium effects of substance use policies is critical for optimal tax design (Pacula 1997). Our study contributes along this dimension by showing that cigarette tax hikes in the United States have generally not led to spillover effects on youth marijuana use.…”

Cigarette Taxes and Teen Marijuana Use

“…Understanding the general equilibrium effects of substance use policies is critical for optimal tax design (Pacula 1997 Notes: Columns (1)-( 3) represent average marginal effects from logit regressions based on data from the YRBS for the period 1991-2017. Column (4) represents results from an OLS regression, where respondents were assigned the midpoint of their chosen binned response.…”

The Demand for Cigarettes as Derived from the Demand for Weight Loss: A Theoretical and Empirical Investigation

“…By examining the bidirectional relationship between obesity and smoking, this paper contributes to the larger economic literature on interactions between risky health behaviors, for example, gateway and stepping stone effects (e.g., Pacula, ; van Ours, ), the complementarity of alcohol and tobacco (e.g., Dee, ), and the substitutability of alcohol and marijuana (e.g., DiNardo and Lemieux, ). In general, such interactions between risky health behaviors are an interesting and promising direction for future research.…”