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

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Author Info
Jeremy Arkes
Rosalie Liccardo Pacula
Susan M. Paddock
Jonathan P. Caulkins
Peter Reuter
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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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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Find related papers by JEL classification:
H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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  1. Jeffrey A. Miron, 2003. "The Effect of Drug Prohibition on Drug Prices: Evidence from the Markets for Cocaine and Heroin," NBER Working Papers 9689, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. 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. [Downloadable!] (restricted)
  3. Caulkins Jonathan P., 1995. "Domestic Geographic Variation in Illicit Drug Prices," Journal of Urban Economics, Elsevier, vol. 37(1), pages 38-56, January. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
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  5. Dave, Dhaval, 2006. "The effects of cocaine and heroin price on drug-related emergency department visits," Journal of Health Economics, Elsevier, vol. 25(2), pages 311-333, March. [Downloadable!] (restricted)
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  6. Jeff DeSimone & Matthew C. Farrelly, 2003. "Price and Enforcement Effects on Cocaine and Marijuana Demand," Economic Inquiry, Oxford University Press, vol. 41(1), pages 98-115, January.
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  7. Henry Saffer & Frank Chaloupka, 1995. "The Demand for Illicit Drugs," NBER Working Papers 5238, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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