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Social costs of robbery and the cost-effectiveness of substance abuse treatment

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  • Anirban Basu

    (Section of General Internal Medicine, Department of Medicine, Center for Health and the Social Sciences, University of Chicago, USA)

  • A. David Paltiel

    (Department of Epidemiology and Public Health, Yale University School of Medicine, USA)

  • Harold A. Pollack

    (School of Social Service Administration, Center for Health Administration Studies, University of Chicago, USA)

Abstract

Reduced crime provides a key benefit associated with substance abuse treatment (SAT). Armed robbery is an especially costly and frequent crime committed by some drug-involved offenders. Many studies employ valuation methods that understate the true costs of robbery, and thus the true social benefits of SAT-related robbery reduction. At the same time, regression to the mean and self-report bias may lead pre-post comparisons to overstate crime reductions associated with SAT. Using 1992-1997 data from the National Treatment Improvement Evaluation Study (NTIES), we examined pre-post differences in self-reported robbery among clients in five residential and outpatient SAT modalities. Fixed-effect negative binomial regression was used to examine incidence rate reductions (IRR) in armed robbery. Published data on willingness to pay to avoid robbery were used to determine the social valuation of these effects. Differences in IRR across SAT modalities were explored to bound potential biases. All SAT modalities were associated with large and statistically significant reductions in robbery. The average number of self-reported robberies declined from 0.83|client|year pre-entry to 0.12|client|year following SAT (p<0.001). Under worst-case assumptions, monetized valuations of reductions in armed robbery associated with outpatient methadone and residential SAT exceeded economic costs of these interventions. Conventional wisdom posits the economic benefits of SAT. We find that SAT is even more beneficial than is commonly assumed. Copyright © 2007 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 17 (2008)
Issue (Month): 8 ()
Pages: 927-946

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Handle: RePEc:wly:hlthec:v:17:y:2008:i:8:p:927-946

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Jerry A. Hausman & Bronwyn H. Hall & Zvi Griliches, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," NBER Technical Working Papers 0017, National Bureau of Economic Research, Inc.
  2. Donohue, John J, III & Siegelman, Peter, 1998. "Allocating Resources among Prisons and Social Programs in the Battle against Crime," The Journal of Legal Studies, University of Chicago Press, vol. 27(1), pages 1-43, January.
  3. Michael T. French & Kerry Anne McGeary, 1997. "Letter: Estimating the economic cost of substance abuse treatment," Health Economics, John Wiley & Sons, Ltd., vol. 6(5), pages 539-544.
  4. Gregory S. Zaric & Margaret L. Brandeau & Paul G. Barnett, 2000. "Methadone Maintenance and HIV Prevention: A Cost-Effectiveness Analysis," Management Science, INFORMS, vol. 46(8), pages 1013-1031, August.
  5. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 225-38, January.
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Cited by:
  1. Harold Pollack & Peter Reuter & Eric Sevigny, 2010. "If Drug Treatment Works So Well, Why Are So Many Drug Users in Prison?," NBER Chapters, in: Controlling Crime: Strategies and Tradeoffs, pages 125-160 National Bureau of Economic Research, Inc.
  2. Anirban Basu, 2011. "Economics of Individualization in Comparative Effectiveness Research and a Basis for a Patient-Centered Health Care," NBER Working Papers 16900, National Bureau of Economic Research, Inc.
  3. Sylvia Brandt & Peter Marie, 2011. "Racial Disparities in Hospital Length of Stay for Asthma: Implications for Economic Policies," Journal of Family and Economic Issues, Springer, vol. 32(1), pages 152-169, March.
  4. Harold Pollack & Peter Reuter & Eric L. Sevigny, 2011. "If Drug Treatment Works So Well, Why Are So Many Drug Users in Prison?," NBER Working Papers 16731, National Bureau of Economic Research, Inc.

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