Using data from the National Survey on Drug Use and Health, evidence of income inferiority in illegal drug consumption is presented. This is done by estimation of binary choice probit models with endogenous regressors. The endogeneity of income with regard to drug consumption is considered and the more efficient three-stage least squares procedures have been implemented. The results indicate that accounting for endogeneity improves results on income inferiority with regard to drug consumption for the overall population. When the respondents are divided into separate work categories, illegal drugs are however found to be normal goods for respondents in school. An implication of this study is that income distribution policies might be effective in controlling drug consumption. It also points out the regressive nature of the government’s substance abuse program.
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Paper provided by Department of Economics, West Virginia University in its series Working Papers with number
05-01.
Find related papers by JEL classification: I12 - Health, Education, and Welfare - - Health - - - Health Production I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
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