Identifying Demand Responses to Illegal Drug Supply Interdictions
The optimality of supply interventions for addictive drugs is a function of demand responses to price, enforcement costs, and the relative size of external costs. Researchers need credible estimates of demand responses, but most research designs use price series affected by law enforcement actions. We present plausibly causal estimates of the price elasticities of demand for various drugs when enforcement costs are relatively low. We exploit arguably exogenous shocks to methamphetamine supplies to identify the effect of methamphetamine prices on demand for methamphetamine, alcohol, cocaine, heroin, and marijuana. Methamphetamine demand is price inelastic with substantial substitution to other drugs.
|Date of creation:||Mar 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (504) 865-5321
Fax: (504) 865-5869
Web page: http://econ.tulane.edu
More information through EDIRC
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.:
- 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.
- Scott Cunningham & Keith Finlay, 2013.
"Parental Substance Use And Foster Care: Evidence From Two Methamphetamine Supply Shocks,"
Western Economic Association International, vol. 51(1), pages 764-782, 01.
- Scott Cunningham & Keith Finlay, 2010. "Parental Substance Abuse and Foster Care: Evidence from Two Methamphetamine Supply Shocks," Working Papers 1003, Tulane University, Department of Economics.
- Sandra L. Decker & Amy Ellen Schwartz, 2000. "Cigarettes and Alcohol: Substitutes or Complements?," NBER Working Papers 7535, National Bureau of Economic Research, Inc.
- Jeremy Arkes & Rosalie Liccardo Pacula & Susan M. Paddock & Jonathan P. Caulkins & Peter Reuter, 2008. "Why the DEA STRIDE Data are Still Useful for Understanding Drug Markets," NBER Working Papers 14224, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:tul:wpaper:1312. 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: (Sean Higgins)
If references are entirely missing, you can add them using this form.