What Price Drug Use? The Contribution of Economics to an Evidence‐Based Drugs Policy

Abstract

Thi s paper present s a revi ew of t he recent econom i cs l i t erat ure i n t he area of i l l i ci t drug use.Part i cul ar at t ent i on i s pai d t o t he econom i cs of addi ct i on and t he rat i onal addi ct i on m odel , t he w el fare econom i cs fram ew ork for anal ysi ng t he soci al cost s of drug use, and t he at t em pt s t hat have been m ade by econom i st s t o eval uat e recent or proposed pol i cy i nt ervent i ons. A dom i nant t hem e i n t hi s revi ew i s t he probl em of poor dat a avai l abi l i t y. Thi s i s part i cul arl y t rue w hen i t com es t o i m pl em ent i ng t he Rat i onal A ddi ct i on m odel , but i t i s al so apparent i n t he l i t erat ure on est i m at i ng t he cost s of i l l i ci t drug use t o soci et y as a w hol e. O ne of t he m ai n concl usi ons of t hi s revi ew i s t hat unt i l recent l y publ i c pol i cy has not been part i cul arl y i nfl uenced by research carri ed out by econom i st s. It i s not cl ear w het her t hi s i s because econom i st s have had t o grappl e w i t h i nadequat e dat a, and hence t hei r concl usi ons are couched i n uncert ai nt y, or w het her i t i s because drugs researchers have assum ed a very l i m i t ed rol e for econom i st s i n t hei r anal ysi s.

Evaluating the drivers of and obstacles to the willingness to use cognitive enhancement drugs: the influence of drug characteristics, social environment, and personal characteristics

“…This finding is in line with economic studies on the supply and demand of illicit drugs (see for instance [36,37]) and confirms the finding from another CE study [35] that the price is important.…”

“…While research on illicit drugs has taken into account the elastic effect of price upon demand [36,37], to our knowledge the effects of price on demand for CE-drugs remains unknown. We assume that individuals also take the price of CE-drugs into account when deciding for or against using such drugs:…”

Cannabis Use and Its Effects on Health, Education and Labor Market Success

“…We do not, however, survey the contributions made by economists on the interaction between drug policy and drug use. Excellent surveys on this topic have been provided by MacDonald (), Pudney (), and Caulkins et al . () .…”

“…A gateway effect could exacerbate potential effects of cannabis use through the use of other more dangerous drugs. However, as for example MacDonald () indicates, empirical research suggests that the relation between early cannabis use and later hard drug use derives from association through unobserved characteristics rather than through a direct causal path.…”

What economics can contribute to the addiction sciences

“…The field of economics offers insight into this domain. Given others' past contributions [1,2], we do not attempt to be comprehensive. We focus instead upon how economics can contribute to understanding in four key areas: (i) the demand for drugs by ‘consumers’ (users); (ii) the supply of drugs by producers, traffickers and sellers; (iii) the consequences of use; and (iv) the effectiveness of policies designed to ameliorate those consequences.…”