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Legal and Illegal Drugs: Determinants and Effects in Regulated and Unregulated Setting

Paper Session

Friday, Jan. 3, 2025 10:15 AM - 12:15 PM (PST)

Clift Royal Sonesta, Calder Room
Hosted By: Health Economics Research Organization
  • Chair: Christopher S. Carpenter, Vanderbilt University

Illegal Drug Use and Government Policy: Evidence from a Darknet Marketplace

Priyanka Goonetilleke
,
Northwestern University
Artem Kuriksha
,
Uber Technologies
Anastasia Karpova
,
University of Illinois-Urbana-Champaign
Peter Meylakhs
,
HSE University

Abstract

This paper develops a structural model of demand for illegal drug varieties and studies how consumers substitute between different types of drugs in response to government policies. We use a unique longitudinal dataset on prices, quantities, and individual decisions that we obtained by scraping a darknet marketplace that covered the majority of the retail illegal drug trade in Russia. Our estimation procedure exploits a novel set of micro-level moment conditions to identify correlations in preferences for specific drug types and the degree of attachment to them. We find that the median own-price elasticity of demand for illegal drugs is -3.6, and there is high substitution within two classes of drugs: medium-risk stimulants and cannabis. We validate our estimates using exogenous variation in the price of hashish caused by increased policing. The estimated model is used to evaluate counterfactual drug policies. We find that the legalization of cannabis has the benefit of decreasing the use of riskier drugs while increasing cannabis use. For every 4 additional doses of cannabis consumed, 1 less dose of another drug is consumed. Our estimates show that the recent introduction of a new family of synthetic drugs has increased total drug demand in the country by 40%, suggesting that governments should allocate resources to prevent the introduction of new drug products. Finally, our model helps identify the optimal drugs to target for interdiction, specifically those without close substitutes, such as alpha-PVP.

Can Educational Outreach Improve Experts’ Decision Making? Evidence from a National Opioid Academic Detailing Program

Jonathan Zhang
,
Duke University

Abstract

Healthcare providers often deviate from clinical guidelines in ways that lead to worse patient outcomes. How do we encourage safer practices and what are its impacts on patient outcomes? I study a setting where 3,397 primary care teams received educational outreach (known as academic detailing) on appropriate pain management, use of risk evaluation tools, harm reduction interventions, and treatment of opioid use disorders. Leveraging a staggered adoption design and rich electronic health records for over 5 million patients, I find that academic detailing had large and persistent impacts on provider behavior. Detailed providers increased prescribing of take-home naloxone (medication used to reverse overdoses), reduced opioid prescribing, and increased prescription drug monitoring program queries for at least three years. Patients treated by detailed providers experienced small subsequent declines in emergency department visits and hospitalizations for overdose, suicides, and accidents, with the effects largely concentrated in heavy prior users of opioids. Pain scores are precisely stable despite reduced opioid prescriptions.

Marijuana Munchies or Couch Lock: Effects of Recreational Marijuana Laws on Exercise and Nutrition

Shooshan Danagoulian
,
Wayne State University
Monica Deza
,
Syracuse University and NBER
Timothy Hodge
,
Oakland University
Thomas Wilk
,
NBER

Abstract

As marijuana has become legally available to healthy adults with state passage of recreational marijuana laws (RMLs) little is known about its impact on healthy lifestyle choices among this population. While medical marijuana users may derive medicinal benefits, in the absence of these among recreational users makes the magnitude of health behaviors impact imminently relevant for public health. We test the effect of RMLs on exercise and sedentary lifestyle, and consumption of unhealthy foods using multiple sources of data. Using the Behavioral Risk Factor Surveillance System (BRFSS) and the American Time Use Survey (ATUS) for 2011-2022, we show that respondents are less likely to exercise and more likely to spend time at home after the passage of RMLs. The decline in exercise is particularly concerning as the effect is focused in cardio exercises. Next, using mobile device tracking data from Advan for 2019-2022, we find increased visits to fast-food restaurants and convenience stores. We find a similar increase in use of low-nutrition and high-calorie food in the grocery store. Using the Nielsen Consumer Panel data for 2011-2020, we find increased purchases of snacks, chips, cookies, and ice cream after the passage of RMLs. Combined, these results suggest that RMLs has an adverse effect on health not only through "munchies" resulting in a consumption of high-calorie foods, but also through "couch lock" resulting in sedentary lifestyle. While the passage of medical marijuana laws was motivated by its medicinal benefits, RMLs present a significant public health challenge to diet and lifestyle related chronic conditions.

The Effect of Cannabis Laws on Access to Pain Medications among Commercially Insured Patients in the United States

Felipe Lozano-Rojas
,
University of Georgia

Abstract

Chronic pain is a major trigger for opioid prescribing in the U.S. Further, 35 U.S. states and the District of Columbia have adopted medical cannabis laws (MCLs), and chronic pain is the most common condition qualifying for medical cannabis access. In this article, using comprehensive claims data of commercially insured individuals, capturing approximately 15 – 20 million patients per year (2007-2020), we assess nationwide changes in opioid analgesic and non-opioid pain medications dispensed in response to state cannabis access policies, using evidence from 22 state-specific synthetic control case-studies. The methodology allows us to construct stable counterfactuals in the pre-policy period for each case and to accommodate heterogeneity across treated units and their treatment timing. In all except one of the 22 examined states we find reductions in the rate of patients receiving any dispensed prescriptions of opioids (extensive margin) following the legalization of MCLs, several of which are statistically significant at conventional levels. The rate of patients with opioids prescriptions following MCL legalization decreased between 12.6% to 16.6% on average relative to the pre-policy baseline. With decreases ranging from 12% and up to 30% across statistically significant individual state-cases.

We also find a significant reduction in the intensive margin, measured as both the average daily supply of dispensed prescriptions and as the average number of dispensed prescriptions per patient. Considering other non-opioid pain medications, we find some evidence of complementarity between cannabis and non-steroidal anti-inflammatory agents (NSAIDs), as the rates of patients prescribed NSAIDs and the average number of NSAID prescriptions per patient dispensed increased (albeit with lower daily supply per prescription) in response to state cannabis legalization, which we interpret as a favorable impact of expanded cannabis access in light of the lower risks associated with NSAID use relative to prescription opioid use. Our study highlights the large positive

Discussant(s)
Shooshan Danagoulian
,
Wayne State University
Adam Sacarny
,
Columbia University
David Bradford
,
University of Georgia
Lucy Xiaolu Wang
,
University of Massachusetts
JEL Classifications
  • I0 - General
  • H0 - General