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Letter: Economic modelling of the gateway effect

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  • Rosalie Liccardo Pacula

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. © 1997 John Wiley & Sons, Ltd.

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  • Rosalie Liccardo Pacula, 1997. "Letter: Economic modelling of the gateway effect," Health Economics, John Wiley & Sons, Ltd., vol. 6(5), pages 521-524, September.
    • Handle: RePEc:wly:hlthec:v:6:y:1997:i:5:p:521-524
    DOI: 10.1002/(SICI)1099-1050(199709)6:5<521::AID-HEC301>3.0.CO;2-6
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    References listed on IDEAS

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    1. Kandel, D. & Yamaguchi, K., 1993. "From beer to crack: Developmental patterns of drug involvement," American Journal of Public Health, American Public Health Association, vol. 83(6), pages 851-855.
    2. John DiNardo & Thomas Lemieux, 1992. "Alcohol, Marijuana, and American Youth: The Unintended Effects of Government Regulation," NBER Working Papers 4212, National Bureau of Economic Research, Inc.
    3. DiNardo, J. & Lemieux, T., 1992. "Appendix Table for: Alcohol, Marijuana and American Youth: The Unintented Consequences of Government Regulation," Papers 92-17, California Irvine - School of Social Sciences.
    4. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
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    Cited by:

    1. Bretteville-Jensen Anne L & Melberg Hans O & Jones Andrew M, 2008. "Sequential Patterns of Drug Use Initiation - Can We Believe In the Gateway Theory?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(2), pages 1-31, January.
    2. John Cawley & Davide Dragone & Stephanie Von Hinke Kessler Scholder, 2016. "The Demand for Cigarettes as Derived from the Demand for Weight Loss: A Theoretical and Empirical Investigation," Health Economics, John Wiley & Sons, Ltd., vol. 25(1), pages 8-23, January.
    3. Jones, Andrew M., 1999. "Adjustment costs, withdrawal effects, and cigarette addiction," Journal of Health Economics, Elsevier, vol. 18(1), pages 125-137, January.
    4. Pierpaolo Pierani & Silvia Tiezzi, 2009. "Addiction and interaction between alcohol and tobacco consumption," Empirical Economics, Springer, vol. 37(1), pages 1-23, September.
    5. Mikael Bask & Maria Melkersson, 2004. "Rationally addicted to drinking and smoking?," Applied Economics, Taylor & Francis Journals, vol. 36(4), pages 373-381.
    6. Ziggy MacDonald, 2004. "What Price Drug Use? The Contribution of Economics to an Evidence‐Based Drugs Policy," Journal of Economic Surveys, Wiley Blackwell, vol. 18(2), pages 113-152, April.
    7. Kenneth Clements & Yihui Lan & Xueyan Zhao, 2010. "The demand for marijuana, tobacco and alcohol: inter-commodity interactions with uncertainty," Empirical Economics, Springer, vol. 39(1), pages 203-239, August.
    8. Gabriel A. Picone & Frank Sloan & Justin G. Trogdon, 2004. "The effect of the tobacco settlement and smoking bans on alcohol consumption," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 1063-1080, October.
    9. Benjamin Ukert, 2017. "The short- and long-run effects of smoking cessation on alcohol consumption," International Journal of Health Economics and Management, Springer, vol. 17(4), pages 495-519, December.
    10. Almeida, Joanna & Johnson, Renee M. & Matsumoto, Atsushi & Godette, Dionne C., 2012. "Substance use, generation and time in the United States: The modifying role of gender for immigrant urban adolescents," Social Science & Medicine, Elsevier, vol. 75(12), pages 2069-2075.

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