Mental Illness and the Demand for Alcohol, Cocaine, and Cigarettes
AbstractThis article estimates the effect of mental illness on demand for addictive substances, allowing for structural endogeneity and simultaneity between mental illness and addictive consumption. Results show that individuals with a history of mental illness are 26% more likely to consume alcohol, 66% more likely to consume cocaine, and 89% more likely to consume cigarettes. This high-participation group is also price-responsive, although their price elasticities differ somewhat from those without mental illness. The results provide added justification for higher taxes and supply reduction activities. Furthermore, subsidizing the treatment of mental illness can reduce addictive consumption.(JEL I1) Copyright 2005, Oxford University Press.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 43 (2005)
Issue (Month): 2 (April)
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Other versions of this item:
- Henry Saffer & Dhaval Dave, 2002. "Mental Illness and the Demand for Alcohol, Cocaine and Cigarettes," NBER Working Papers 8699, National Bureau of Economic Research, Inc.
- I1 - Health, Education, and Welfare - - Health
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