Illicit drug use among arrestees, prices and policy
Prior studies, by relying on nationally representative surveys, have overlooked the important fact that use of addictive substances is not uniformly distributed; subgroups of hardcore users account for most of the drug consumption. This study employs the Arrestee Drug Abuse Monitoring system to analyze the demand for cocaine and heroin by urban arrestees, employing objective indicators of use based on urinalysis. The data are repeated city cross sections, and panel data methodology is employed to account for endogeneity. Cocaine and heroin prices have a negative effect on the probability of use even among this group of heavy users. Results indicate that subjective, self-reported measures of participation are likely to be under-reported, which may impart bias to estimates of the price elasticity. The own-price cocaine participation elasticity is about -0.15, and the own-price heroin participation elasticity is about -0.10 for arrestees. This contemporaneous elasticity understates the full effect, and the long-run price elasticity is about twice the magnitude. The magnitude of the price response is substantially smaller relative to the estimates in the prior literature, and calculations suggest that further enforcement and interdiction-driven increases in drug prices may not be cost-effective.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kuziemko, Ilyana & Levitt, Steven D., 2004.
"An empirical analysis of imprisoning drug offenders,"
Journal of Public Economics,
Elsevier, vol. 88(9-10), pages 2043-2066, August.
- Ilyana Kuziemko & Steven D. Levitt, 2001. "An Empirical Analysis of Imprisoning Drug Offenders," NBER Working Papers 8489, National Bureau of Economic Research, Inc.
- repec:oup:restud:v:58:y:1991:i:2:p:277-97 is not listed on IDEAS
- 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.
- 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.
- Caulkins Jonathan P., 1995. "Domestic Geographic Variation in Illicit Drug Prices," Journal of Urban Economics, Elsevier, vol. 37(1), pages 38-56, January.
- Grossman, Michael & Chaloupka, Frank J & Sirtalan, Ismail, 1998.
"An Empirical Analysis of Alcohol Addiction: Results from the Monitoring the Future Panels,"
Western Economic Association International, vol. 36(1), pages 39-48, January.
- Michael Grossman & Frank J. Chaloupka & Ismail Sirtalan, 1995. "An Empirical Analysis of Alcohol Addiction: Results from the Monitoring the Future Panels," NBER Working Papers 5200, National Bureau of Economic Research, Inc.
- Saffer, Henry & Chaloupka, Frank, 1999.
"The Demand for Illicit Drugs,"
Western Economic Association International, vol. 37(3), pages 401-11, July.
- Jeff DeSimone & Matthew C. Farrelly, 2003.
"Price and Enforcement Effects on Cocaine and Marijuana Demand,"
Western Economic Association International, vol. 41(1), pages 98-115, January.
- Jeff DeSimone & Matthew C. Farrelly, . "Price and Enforcement Effects on Cocaine and Marijuana Demand," Working Papers 0101, East Carolina University, Department of Economics.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:eee:juecon:v:63:y:2008:i:2:p:694-714. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.