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The Downward Spiral

Author

Listed:
  • Jeremy Greenwood

    (University of Pennsylvania)

  • Nezih Guner

    (UAB, ICREA, BSE)

  • Karen A. Kopecky

    (FRB Atlanta, Emory University)

Abstract

There have been more than 500,000 opioid overdose deaths since 2000. To analyze the opioid epidemic, a model is constructed where individuals choose whether to use opioids recreationally, knowing the probabilities of addiction and dying. These odds are functions of recreational opioid usage. Markov chains are estimated from the US data for the college and non-college educated that summarize the transitions into and out of opioid addiction as well as to a deadly overdose. The structural model is constructed to match the estimated Markov chains. The epidemic’s drivers and the impact of medical interventions are examined.

Suggested Citation

  • Jeremy Greenwood & Nezih Guner & Karen A. Kopecky, 2022. "The Downward Spiral," PIER Working Paper Archive 22-005, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    • Handle: RePEc:pen:papers:22-005
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    References listed on IDEAS

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    Cited by:

    1. Chaoran Chen & Zhigang Feng & Jiaying Gu, 2022. "Health, Health Insurance, and Inequality," Working Papers tecipa-730, University of Toronto, Department of Economics.
    2. Jeremy Greenwood & Nezih Guner & Karen A. Kopecky, 2022. "Substance Abuse during the Pandemic: Implications for Labor-Force Participation," Economie d'Avant Garde Research Reports 35, Economie d'Avant Garde.
    3. Casey B. Mulligan, 2022. "Lethal Unemployment Bonuses? Substitution and Income Effects on Substance Abuse, 2020-21," NBER Working Papers 29719, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    addiction; college/non-college educated; deaths; fentanyl; Markov chain; medical interventions; opioids; OxyContin; pain; prices; state-contingent preferences; structural model; subjective and objective beliefs;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

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