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State Drug Control Spending And Illicit Drug Participation

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Abstract

The purpose of this article is to estimate the effect of state criminal justice expenditures and state public health expenditures on deterring illicit drug use. The empirics are based on a demand-and-supply model of drug markets. The effect of a given expenditure on criminal justice or public health programs is dependent on the magnitude of the resulting shifts in the two functions and the demand price elasticity. A reduced form of the demand-and-supply model is also estimated. The data employed come from the 1990 and 1991 National Household Surveys on Drug Abuse (NHSDA). Data on state and local spending for drug-related criminal justice and drug-related public health programs were merged with the NHSDA. The main findings from the regression results are that drug control spending reduces drug use. However, the results suggest that for marijuana users, the marginal cost of drug control exceeds the social benefits of drug control. This may not be the case for users of other illicit drugs. Spending for drug enforcement by police and drug treatment is found most effective in deterring drug use. However, spending for correctional facilities is never significant, which suggests that a more efficient method of reducing drug use might be to reduce correctional facilities spending and increase spending on treatment. Copyright 2001 Western Economic Association International.

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  • H Saffer & FJ Chaloupka & D Dave, 2001. "State Drug Control Spending And Illicit Drug Participation," Contemporary Economic Policy, Western Economic Association International, vol. 19(2), pages 150-161, April.
  • Handle: RePEc:bla:coecpo:v:19:y:2001:i:2:p:150-161
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    1. 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.
    2. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    3. Anne Line Bretteville-Jensen & Matthew Sutton, 1996. "Under the influence of the market: an applied study of illicitly selling and consuming heroin," Working Papers 147chedp, Centre for Health Economics, University of York.
    4. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-685, May.
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    Cited by:

    1. Dhaval Dave & Swati Mukerjee, 2011. "Mental health parity legislation, cost‐sharing and substance‐abuse treatment admissions," Health Economics, John Wiley & Sons, Ltd., vol. 20(2), pages 161-183, February.
    2. Chatterji, Pinka & Markowitz, Sara, 2001. "The impact of maternal alcohol and illicit drug use on children's behavior problems: evidence from the children of the national longitudinal survey of youth," Journal of Health Economics, Elsevier, vol. 20(5), pages 703-731, September.
    3. Dhaval Dave, 2004. "Illicit Drug Use Among Arrestees and Drug Prices," NBER Working Papers 10648, National Bureau of Economic Research, Inc.
    4. Clements, Kenneth W. & Daryal, Mert, 2005. "Exogenous shocks and related goods: Drinking and the legalisation of marijuana," Economics Letters, Elsevier, vol. 89(1), pages 101-106, October.
    5. Juan Carlos Echeverry, 2004. "Colombia And The War On Drugs, How Short Is The Short Run?," DOCUMENTOS CEDE 002133, UNIVERSIDAD DE LOS ANDES-CEDE.
    6. Beth A. Freeborn & Brian McManus, 2010. "Substance Abuse Treatment and Motor Vehicle Fatalities," Southern Economic Journal, Southern Economic Association, vol. 76(4), pages 1032-1048, April.
    7. Carlos Dobkin & Nancy Nicosia, 2009. "The War on Drugs: Methamphetamine, Public Health, and Crime," American Economic Review, American Economic Association, vol. 99(1), pages 324-349, March.
    8. Anne Bretteville-Jensen, 2006. "Drug Demand – Initiation, Continuation and Quitting," De Economist, Springer, vol. 154(4), pages 491-516, December.
    9. Swensen, Isaac D., 2015. "Substance-abuse treatment and mortality," Journal of Public Economics, Elsevier, vol. 122(C), pages 13-30.
    10. Pinka Chatterji & Sara Markowitz, 2000. "The Impact of Maternal Alcohol and Illicit Drug Use on Children's Behavior Problems: Evidence from the Children of the National Longitudinal Survey..," NBER Working Papers 7692, National Bureau of Economic Research, Inc.
    11. Hope Corman & Kelly Noonan & Nancy E. Reichman & Dhaval Dave, 2004. "Demand for Illicit Drugs by Pregnant Women," NBER Working Papers 10688, National Bureau of Economic Research, Inc.

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