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Utilization of a rational addiction approach shows that consumption of cocaine by young adults is addictive. Such finding was derived mainly because the rise in past or future consumption of cocaine cause current consumption to increase. A long-term price elasticity of -1.35, which is 40% higher than the short-term price elasticity, was derived. Meanwhile, the price of cocaine maintains a negative relationship with annual participation and frequency of use.

In economic analyses of addictive behavior, the consumption of a certain good is termed to be an addiction if an increase in past consumption of the good leads to an increase in current consumption. From policy, legal, and public health perspectives, addictive goods are of interest because the consumption of many of these goods harms the consumer and others. The U.S. government and those of many other countries have chosen to regulate such addictive substances as cigarettes, alcohol cocaine, and marijuana by means of policies that raise their prices. Consequently, the responsiveness of these substances to price is an important parameter in determining the optimal level of taxation or the impacts of legalization of cocaine or marijuana. The economics of addiction is very relevant to these issues because recent theoretical advances predict that addictive goods should be more sensitive to price than previously believed. Current empirical studies confirm this prediction.

In a panel of young adults, we find that alcohol consumption is addictive in the sense that increases in past or future consumption cause current consumption to rise. The positive and significant future consumption effect is consistent with the hypothesis of rational addiction. The long-run price elasticity is approximately 60% larger than the short-run price elasticity and twice as large as the elasticity that ignores addiction. Thus, a tax hike policy to curtail consumption or abuse may not have a favorable cost-benefit ratio unless it is based on the long-run price elasticity., I. INTRODUCTION This paper aims to refine and enrich the empirical literature dealing with the price sensitivity of alcohol consumption by incorporating insights provided by Becker and Murphy's [1988] theoretical [...]

Increased cigarette excise taxes, which could lead to an increase in prices, can significantly reduce the smoking participation and average daily consumption of US college students. However, regulations that prohibit smoking in public places and private offices are considered to have a lower influence as compared to the price on cigarette smoking. Persons with lower income appear to have greater sensitivity to cigarette prices than those who have higher income.

This paper estimates the effects of beer prices, alcohol availability, and policies related to driving under the influence of alcohol on drinking and binge drinking among youths and young adults. Data are from a nationally representative survey of students in U.S. colleges and universities. Separate estimates are obtained for underage male and female students, as well as for older male and female students. The estimates indicate that the drinking practices of male college students are generally insensitive to the price of beer. However, underage drinking and binge drinking by female students do respond significantly to price, although both are relatively inelastic. The results also show that strong drunk driving policies targeting youths and young adults significantly reduce drinking and binge drinking by male students. Similarly, these policies reduce drinking among female college students but appear to have little impact on their binge drinking. Instead, the results indicate that many elements of campus life (including participation in a fraternity or sorority, living on campus, and the ready availability of alcoholic beverages) are among the most important determinants of drinking and binge drinking among college students., I. INTRODUCTION The past two decades have seen significant progress in reducing the use and abuse of alcoholic beverages, particularly among youths and young adults. For example, heavy drinking occasions [...]

This paper examines the impact of survey conditions on the self-reported use of marijuana, cocaine, and alcohol in the 1984 and 1988 waves of the National Longitudinal Survey of Youth (NLSY). The analysis obtains probit estimates of lifetime and current participation rates and ordered probit estimates for the current frequency of use. The results dearly indicate that the manner in which the NLSY survey is administered significantly affects the self-reported substance use data. The presence of others at administration, self-administration, and data collection by telephone interview are particularly important influences., I. INTRODUCTION The problems associated with substance use and abuse, particularly among youths, recently have received increasing attention. Economists and others have analyzed the determinants of cigarette smoking, drinking, and [...]

Results of economic modeling suggest correlations between the prices of alcoholic beverages and the level of drinking in a population. Higher alcohol prices may lead to reductions in the medical [...]

This paper examines the frequencies of youth drinking and heavy drinking in 1982 and 1989 and separately examines the effects of minimum legal drinking ages and beer excise taxes for each year. In both years, drinking is responsive to price changes resulting from higher excise taxes. However, the price sensitivity of youth alcohol use fell after states changed to a uniform minimum legal drinking age of 21., I. INTRODUCTION Between 1970 and 1975, 29 states lowered their minimum legal drinking ages for alcohol to comply with a change in the voting age from 21 to 18 in [...]

This paper empirically tests the effect of clean indoor air laws on smoking. Public place clean indoor air laws restrict cigarette smoking in public places such as restaurants. Private place clean air laws regulate smoking in private work places as well as in public places. This study uses a time series of cross sections of the 50 states of the United States and Washington, D.C., from 1975 through 1985, to estimate single equation and simultaneous equation models of cigarette demand. The single equation results indicate that both the public place law and the private work place law have a negative effect on cigarette demand. However, a test for endogeneity shows that the enactment of clean indoor air laws is a function of cigarette demand. Results from a simultaneous equations model indicate that the public place law has a significant negative impact on cigarette demand, while the work place law has no effect on cigarette demand. Although these results demonstrate that only states with low levels of smoking have passed work place clean air laws, the results do not imply that the level of smoking would not decrease if such a law were imposed in all states., The ban on smoking is studied in relation to its effect on cigarette demand. Both public and private or workplace clean air laws are considered in a time series model using both single and simultaneous equations. Results indicate that public anti-smoking laws reduce the demand for cigarettes whereasworkplace laws do not clearly dampen the demand for cigarettes. Moreover, workplace laws are seen to have been instituted in states with already low levels of smoking. The possibility of workplace laws reducing cigarette usage cannot however be discounted although such has not been effectively proven by research results.

Abstract Background Aspects of the food environment such as the availability of different types of food stores have recently emerged as key modifiable factors that may contribute to the increased prevalence of obesity. Given that many of these studies have derived their results based on secondary datasets and the relationship of food stores with individual weight outcomes has been reported to vary by store type, it is important to understand the extent to which often-used secondary data correctly classify food stores. We evaluated the classification bias of food stores in Dun & Bradstreet (D&B) and InfoUSA commercial business lists. Methods We performed a full census in 274 randomly selected census tracts in the Chicago metropolitan area and collected detailed store attributes inside stores for classification. Store attributes were compared by classification match status and store type. Systematic classification bias by census tract characteristics was assessed in multivariate regression. Results D&B had a higher classification match rate than InfoUSA for supermarkets and grocery stores, while InfoUSA was higher for convenience stores. Both lists were more likely to correctly classify large supermarkets, grocery stores, and convenience stores with more cash registers and different types of service counters (supermarkets and grocery stores only). The likelihood of a correct classification match for supermarkets and grocery stores did not vary systemically by tract characteristics whereas convenience stores were more likely to be misclassified in predominately Black tracts. Conclusion Researches can rely on classification of food stores in commercial datasets for supermarkets and grocery stores whereas classifications for convenience and specialty food stores are subject to some systematic bias by neighborhood racial/ethnic composition.