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Why the DEA STRIDE Data are Still Useful for Understanding Drug Markets

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  • Jeremy Arkes
  • Rosalie Liccardo Pacula
  • Susan M. Paddock
  • Jonathan P. Caulkins
  • Peter Reuter
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    Abstract

    In 2001, use of the STRIDE data base for the purposes of analyzing drug prices and the impact of public policies on drug markets came under serious attack by the National Research Council (Manski et al., 2001; Horowitz, 2001). While some of the criticisms raised by the committee were valid, many of the concerns can be easily addressed through more careful use of the data. In this paper, we first disprove Horowitz's main argument that prices are different for observations collected by different agencies within a city. We then revisit other issues raised by the NRC and discuss how certain limitations can be easily overcome through the adoption of random coefficient models of drug prices and by paying serious attention to drug form and distribution levels. Although the sample remains a convenience sample, we demonstrate how construction of city-specific price and purity series that pay careful attention to the data and incorporate existing knowledge of drug markets (e.g. the expected purity hypothesis) are internally consistent and can be externally validated. The findings from this study have important implications regarding the utility of these data and the appropriateness of using them in economic analyses of supply, demand and harms.

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    File URL: http://www.nber.org/papers/w14224.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14224.

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    Date of creation: Aug 2008
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    Handle: RePEc:nbr:nberwo:14224

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    1. Saffer, Henry & Chaloupka, Frank, 1999. "The Demand for Illicit Drugs," Economic Inquiry, Western Economic Association International, vol. 37(3), pages 401-11, July.
    2. Jeff DeSimone & Matthew C. Farrelly, 2003. "Price and Enforcement Effects on Cocaine and Marijuana Demand," Economic Inquiry, Western Economic Association International, vol. 41(1), pages 98-115, January.
    3. Jeffrey A. Miron, 2003. "The Effect of Drug Prohibition on Drug Prices: Evidence from the Markets for Cocaine and Heroin," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 522-530, August.
    4. Jonathan P. Caulkins, 1997. "Modeling the Domestic Distribution Network for Illicit Drugs," Management Science, INFORMS, vol. 43(10), pages 1364-1371, October.
    5. Dhaval Dave, 2004. "The Effects of Cocaine and Heroin Prices on Drug-Related Emergency Department Visits," NBER Working Papers 10619, National Bureau of Economic Research, Inc.
    6. Grossman, Michael & Chaloupka, Frank J., 1998. "The demand for cocaine by young adults: a rational addiction approach," Journal of Health Economics, Elsevier, vol. 17(4), pages 427-474, August.
    7. Caulkins Jonathan P., 1995. "Domestic Geographic Variation in Illicit Drug Prices," Journal of Urban Economics, Elsevier, vol. 37(1), pages 38-56, January.
    8. Horowitz J.L., 2001. "Should the DEAs STRIDE Data Be Used for Economic Analyses of Markets for Illegal Drugs?," Journal of the American Statistical Association, American Statistical Association, vol. 96, pages 1254-1271, December.
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    Cited by:
    1. L. Leoncini & F. Rentocchini, 2010. "Counteracting cocaine production. An analysis based on a novel dataset," Working Papers 693, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Scott Cunningham & Keith Finlay, 2010. "Parental Substance Abuse and Foster Care: Evidence from Two Methamphetamine Supply Shocks," Working Papers 1003, Tulane University, Department of Economics.
    3. Scott Cunningham & Keith Finlay, 2013. "Identifying Demand Responses to Illegal Drug Supply Interdictions," Working Papers 1312, Tulane University, Department of Economics.

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