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Letter: Economic modelling of the gateway effect

Author

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  • Rosalie Liccardo Pacula

    (University of San Diego, USA)

Abstract

Although a significant number of empirical studies provide evidence of sequencing in drug use, economic theory remains focused on addiction to a single substance. This paper presents a general model of substance use that allows for the possibility of multi-commodity habit formation and can be used to analyse the intertemporal relationship between the consumption of legal and illicit drugs, or the gateway effect. A simple two-drug model is analysed and conditions for the existence of multi-commodity habit formation are examined. It is found in the case of multi-commodity habit formation that the marginal utility of initiating a new drug is higher when there is prior consumption of the other drug. Further, it is found that the individual will initiate drug consumption with that drug that has the lowest marginal cost. The particular sequencing of drug use that is observed in empirical data is explained by differences in the marginal cost of consuming legal and illegal drugs. © 1997 John Wiley & Sons, Ltd.

Suggested Citation

  • Rosalie Liccardo Pacula, 1997. "Letter: Economic modelling of the gateway effect," Health Economics, John Wiley & Sons, Ltd., vol. 6(5), pages 521-524.
  • Handle: RePEc:wly:hlthec:v:6:y:1997:i:5:p:521-524
    DOI: 10.1002/(SICI)1099-1050(199709)6:5<521::AID-HEC301>3.0.CO;2-6
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    Cited by:

    1. Bretteville-Jensen Anne L & Melberg Hans O & Jones Andrew M, 2008. "Sequential Patterns of Drug Use Initiation - Can We Believe In the Gateway Theory?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(2), pages 1-31, January.
    2. Jones, Andrew M., 1999. "Adjustment costs, withdrawal effects, and cigarette addiction," Journal of Health Economics, Elsevier, vol. 18(1), pages 125-137, January.
    3. Pierpaolo Pierani & Silvia Tiezzi, 2009. "Addiction and interaction between alcohol and tobacco consumption," Empirical Economics, Springer, vol. 37(1), pages 1-23, September.
    4. Mikael Bask & Maria Melkersson, 2004. "Rationally addicted to drinking and smoking?," Applied Economics, Taylor & Francis Journals, vol. 36(4), pages 373-381.
    5. Kenneth Clements & Yihui Lan & Xueyan Zhao, 2010. "The demand for marijuana, tobacco and alcohol: inter-commodity interactions with uncertainty," Empirical Economics, Springer, vol. 39(1), pages 203-239, August.
    6. Gabriel A. Picone & Frank Sloan & Justin G. Trogdon, 2004. "The effect of the tobacco settlement and smoking bans on alcohol consumption," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 1063-1080.
    7. repec:kap:ijhcfe:v:17:y:2017:i:4:d:10.1007_s10754-017-9220-1 is not listed on IDEAS
    8. Almeida, Joanna & Johnson, Renee M. & Matsumoto, Atsushi & Godette, Dionne C., 2012. "Substance use, generation and time in the United States: The modifying role of gender for immigrant urban adolescents," Social Science & Medicine, Elsevier, vol. 75(12), pages 2069-2075.

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