Prohibition vs. Taxification: Drug Control Policy in the USA
It is generally thought that legalization of the sale and use of currently illegal drugs would lead to a dramatic increase in drug use and social costs associated with drug abuse and criminal behavior. In this paper we show that it is not necessarily the case that legalization of drugs would be followed by an increase in use. Specifically, if drugs were legalized and taxed, then drug use can be held constant by spending a small fraction of the tax revenues (10.8 per cent in the case of cocaine) on treatment programs. Even if none of the tax revenues are spent on reducing the demand for drugs, the external cost associated with the increase in use from legalization (i.e., costs to society caused by users but borne by others) is only a small fraction of the tax revenues collected (13.2 per cent in the case of cocaine).
|Date of creation:||1996|
|Contact details of provider:|| Postal: 2424 Maile Way, Honolulu, HI 96822|
Web page: http://www.economics.hawaii.edu/
More information through EDIRC
|Order Information:|| Web: http://www.economics.hawaii.edu/research/working.html Email: |
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.:
When requesting a correction, please mention this item's handle: RePEc:hai:wpaper:199608. 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: (Web Technician)
If references are entirely missing, you can add them using this form.