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Are Illegal Drugs Inferior Goods?

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  • Suryadipta Roy

    (West Virginia University)

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    Abstract

    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 simultaneity issue between drug consumption and income has been addressed by using a two-step estimation procedure. The results indicate that accounting for simultaneity shows income inferiority with regard to drug consumption. An implication of this study is that income distributive 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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    File URL: http://www.be.wvu.edu/div/econ//work/pdf_files/05-01old.pdf
    File Function: First version, 2005
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    Bibliographic Info

    Paper provided by Department of Economics, West Virginia University in its series Working Papers with number 05-01old Classification- JEL: H51, I12.

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    Length: 34 pages
    Date of creation: 2005
    Date of revision:
    Handle: RePEc:wvu:wpaper:05-01old

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    Web page: http://www.be.wvu.edu/div/econ/
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    Keywords: income inferiority; illegal drugs; public policy;

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