Are Illegal Drugs Inferior Goods in the US?
- Suryadipta Roy
- … show all 1 hide
Rent the article at a discountRent now
* Final gross prices may vary according to local VAT.Get Access
Using data from the National Survey on Drug Use and Health, evidence of income inferiority in illegal drug consumption is presented. This is done by estimation of binary choice probit models with endogenous regressors. The endogeneity of income with regard to drug consumption is considered and the more efficient three-stage least squares procedures have been implemented. In general, the results indicate that accounting for endogeneity improves results on income inferiority with regard to drug consumption. An implication of this study is that some form of income distribution policies towards the poor might be more effective in controlling substance abuse. It also points out the regressive nature of the government’s substance abuse program.
- Becker, G. S., & Murphy, K. M. (1988). A theory of rational addiction. Journal of Political Economy, 96(4), 675–700. CrossRef
- Chaloupka, F. J., Michael, G., & Tauras, J. A. (1999). The demand for cocaine and marijuana by youth. In F. J. Chaloupka, G. Michael, W. K. Bickel, & H. Saffer (Ed.), The economic analysis of substance use and abuse: An integration of econometric and behavioral research (pp. 251–278). NBER, Chicago, IL: University of Chicago Press.
- Gill, A. M., & Michaels, R. J. (1992). Does drug use lower wages? Industrial and Labor Relations Review, 45(3), 419–434. CrossRef
- Hausman, J. A. (1978). Specification tests in econometrics. Econometrica, 46(6), 1251–1271. CrossRef
- Hausman, J. A. (1983). Specification and estimation of simultaneous equations models. In Z. Griliches & M. D. Intriligator (Eds.), Handbook of econometrics (pp. 391–448). Amsterdam: Elsevier.
- Holcombe, R. G. (1995). Public policy and the quality of life: market incentives versus government planning. Westport CT: Greenwood Press.
- Kaestner, R. (1991). The effect of illicit drug use on the wages of young adults. Journal of Labor Economics, 9(4), 381–412. CrossRef
- Kaestner, R. (1994a). New estimates of the effect of marijuana and cocaine use on wages. Industrial and Labor Relations Review, 47(3), 454–470. CrossRef
- Kaestner, R. (1994b). The effect of illicit drug use on the labor supply of young adults. Journal of Human Resources, 29(1), 126–155. CrossRef
- Kaestner, R. (1998). Illicit drug use and labor market outcomes: A review of economic theory and its empirical implications. Journal of Drug Issues, 28(3), 663–680.
- Kenkel, D. S., Ribar, D. C., Cook, P. J., & Peltzman S. (1994). Alcohol consumption and young adults’ socioeconomic status. Brookings Papers on Economic Activity. Microeconomics, 1994, 119–175. CrossRef
- Saffer, H., & Chaloupka, F. (1999). The demand for illicit drugs. Economic Enquiry, 37(3), 401–411. CrossRef
- Sickles, R., & Taubman, P. (1991). Who uses illegal drugs? American Economic Review, 81(2), 248–251.
- Thornton, M. (1991). Economists on illegal drugs: A survey of the profession. Atlantic Economic Journal, 19(2), 73. CrossRef
- Thornton, M. (2004). Prohibition vs. legalization: Do economists reach a conclusion on drug policy? Econ Journal Watch, 1(1), 82–105.
- Are Illegal Drugs Inferior Goods in the US?
Atlantic Economic Journal
Volume 35, Issue 3 , pp 303-314
- Cover Date
- Print ISSN
- Online ISSN
- Springer US
- Additional Links
- Income inferiority
- Illegal drugs
- Public policy
- Industry Sectors
- Suryadipta Roy (1)
- Author Affiliations
- 1. Department of Economics, Lawrence University, Appleton, WI, 54912, USA