IDEAS home Printed from https://ideas.repec.org/a/oup/ecinqu/v37y1999i3p401-11.html
   My bibliography  Save this article

The Demand for Illicit Drugs

Author

Listed:
  • Saffer, Henry
  • Chaloupka, Frank

Abstract

This paper estimates the effects of alcohol prices, marijuana decriminalization, cocaine prices, and heroin prices on the demand for these four substances. Both own price effects and cross price effects are estimated. The estimated price elasticities for alcohol, cocaine, and heroin are, respectively, -.30, -.28 and -.94. Marijuana decriminalization was found to increase the probability of marijuana participation by about 8%. The results for the cross price effects provide general evidence of complementarity. It is estimated that decriminalization of cocaine and heroin might lead to about 260,000 new regular cocaine users and about 47,000 new regular heroin users. Copyright 1999 by Oxford University Press.

Suggested Citation

  • Saffer, Henry & Chaloupka, Frank, 1999. "The Demand for Illicit Drugs," Economic Inquiry, Western Economic Association International, vol. 37(3), pages 401-411, July.
    • Handle: RePEc:oup:ecinqu:v:37:y:1999:i:3:p:401-11
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Manning, W. G. & Duan, N. & Rogers, W. H., 1987. "Monte Carlo evidence on the choice between sample selection and two-part models," Journal of Econometrics, Elsevier, vol. 35(1), pages 59-82, May.
    2. Silverman, Lester P. & Spruill, Nancy L., 1977. "Urban crime and the price of heroin," Journal of Urban Economics, Elsevier, vol. 4(1), pages 80-103, January.
    3. Pacula, Rosalie Liccardo, 1998. "Does increasing the beer tax reduce marijuana consumption?," Journal of Health Economics, Elsevier, vol. 17(5), pages 557-585, October.
    4. John DiNardo & Thomas Lemieux, 1992. "Alcohol, Marijuana, and American Youth: The Unintended Effects of Government Regulation," NBER Working Papers 4212, National Bureau of Economic Research, Inc.
    5. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    6. Sickles, Robin & Taubman, Paul, 1991. "Who Uses Illegal Drugs?," American Economic Review, American Economic Association, vol. 81(2), pages 248-251, May.
    7. Nisbet, Charles T & Vakil, Firouz, 1972. "Some Estimates of Price and Expenditure Elasticities of Demand for Marijuana Among U.C.L.A. Students," The Review of Economics and Statistics, MIT Press, vol. 54(4), pages 473-475, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Frank J. Chaloupka & Michael Grossman & John A. Tauras, 1999. "The Demand for Cocaine and Marijuana by Youth," NBER Chapters, in: The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research, pages 133-156, National Bureau of Economic Research, Inc.
    2. 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.
    3. Anne Bretteville-Jensen, 2006. "Drug Demand – Initiation, Continuation and Quitting," De Economist, Springer, vol. 154(4), pages 491-516, December.
    4. Henry Saffer & Frank J. Chaloupka, 1999. "Demographic Differentials in the Demand for Alcohol and Illicit Drugs," NBER Chapters, in: The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research, pages 187-212, National Bureau of Economic Research, Inc.
    5. Rosalie Liccardo Pacula, 1998. "Adolescent Alcohol and Marijuana Consumption: Is There Really a Gateway Effect?," NBER Working Papers 6348, National Bureau of Economic Research, Inc.
    6. Rosalie Liccardo Pacula & Michael Grossman & Frank J. Chaloupka & Patrick M. O'Malley & Lloyd D. Johnston & Matthew C. Farrelly, 2001. "Marijuana and Youth," NBER Chapters, in: Risky Behavior among Youths: An Economic Analysis, pages 271-326, National Bureau of Economic Research, Inc.
      • R. L. Pacula & M. Grossman & F. J. Chaloupka & P. M. O'Malley & Lloyd D. Johnston & Matthew C. Farrelly, 2000. "Marijuana and Youth," NBER Working Papers 7703, National Bureau of Economic Research, Inc.
    7. K.W. Clements & M. Daryal, 1999. "The Economics of Marijuana Consumption," Economics Discussion / Working Papers 99-20, The University of Western Australia, Department of Economics.
    8. Liu, Jin-Long & Liu, Jin-Tan & Hammitt, James K. & Chou, Shin-Yi, 1999. "The price elasticity of opium in Taiwan, 1914-1942," Journal of Health Economics, Elsevier, vol. 18(6), pages 795-810, December.
    9. Jofre-Bonet, Mireia & Petry, Nancy M., 2008. "Trading apples for oranges?: Results of an experiment on the effects of Heroin and Cocaine price changes on addicts' polydrug use," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 281-311, May.
    10. Cook, Philip J. & Moore, Michael J., 2000. "Alcohol," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 30, pages 1629-1673, Elsevier.
    11. Matloob Piracha & Stephane Mahuteau & Massimiliano Tani, 2010. "Selection Policy and Immigrants’ Remittance Behaviour," Studies in Economics 1003, School of Economics, University of Kent.
    12. Kenneth W. Clements, 2004. "Three facts about marijuana prices," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(2), pages 271-300, June.
    13. Katharina Stepping, 2012. "The determinants of selection and allocation decisions for health assistance. Which role do health indicators play?," MAGKS Papers on Economics 201231, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    14. Fang, Kuangnan & Wang, Xiaoyan & Shia, Ben-Chang & Ma, Shuangge, 2016. "Identification of proportionality structure with two-part models using penalization," Computational Statistics & Data Analysis, Elsevier, vol. 99(C), pages 12-24.
    15. Zhang, Xuelin & Morissette, Rene, 2001. "Which Firms Have High Job Vacancy Rates in Canada?," Analytical Studies Branch Research Paper Series 2001176e, Statistics Canada, Analytical Studies Branch.
    16. M. Daryal, 1999. "Prices, Legislation and Marijuana Consumption," Economics Discussion / Working Papers 99-21, The University of Western Australia, Department of Economics.
    17. Juan Camilo Castillo & Daniel Mejía & Pascual Restrepo, 2020. "Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War," The Review of Economics and Statistics, MIT Press, vol. 102(2), pages 269-286, May.
    18. Peter Egger & Mario Larch & Kevin E. Staub & Rainer Winkelmann, 2011. "The Trade Effects of Endogenous Preferential Trade Agreements," American Economic Journal: Economic Policy, American Economic Association, vol. 3(3), pages 113-143, August.
    19. Kenneth W. Clements & Xueyan Zhao, 2005. "Economic Aspects of Marijuana," Economics Discussion / Working Papers 05-28, The University of Western Australia, Department of Economics.
    20. William H Greene & Mark N Harris & Preety Srivastava & Xueyan Zhao, 2013. "Econometric Modelling of Social Bads," Bankwest Curtin Economics Centre Working Paper series WP1305, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ecinqu:v:37:y:1999:i:3:p:401-11. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.