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The Economic Analysis of Substance Use and Ab·use ANationalBureau ofEconomicResearch ConferenceReport The Economic Analysis of Substance Use and Abuse An Integration of Econometric and Behavioral Economic Research Frank J. Chaloupka, Editedby Michael Grossman, Warren K. Bickel, and Henry Saffer TheUniversityofChicagoPress Chicago andLondon FRANKJ.CHALOUPKAisprofessorofeconomicsattheUniversityofIlli noisatChicago,directorofImpacTeen:APolicyResearchPartnershipto ReduceYouthSubstanceAbuseattheUICHealthResearchandPolicy Centers,andaresearchassociateoftheNationalBureauofEconomic Research.MICHAELGROSSMANisdistinguishedprofessorofeconomics attheCityUniversityofNewYorkGraduateSchoolanddirectorofthe HealthEconomicsProgramatandaresearchassociateoftheNational BureauofEconomicResearch.WARRENK.BICKELisprofessorofpsy chiatryandpsychologyattheUniversityofVermont.HENRYSAFFERis professorofeconomicsatKeanUniversityofNewJerseyandaresearch associateoftheNationalBureauofEconomicResearch. TheUniversityofChicagoPress,Chicago60637 TheUniversityofChicagoPress,Ltd.,London © 1999bytheNationalBureauofEconomicResearch Allrightsreserved.Published1999 08070605040302010099 12345 ISBN:0-226-10047-2(cloth) LibraryofCongressCataloging-in-PublicationData Theeconomicanalysisofsubstanceuseandabuse:anintegrationof econometricandbehavioraleconomicresearch/editedbyFrankJ. Chaloupka...[etal.]. p. cm.- (ANationalBureauofEconomicResearchconference report) Includesbibliographicalreferencesandindex. ISBN0-226-10047-2(cloth:alk.paper) 1.Substanceabuse-Economicaspects-UnitedStates Congresses. I.Chaloupka,FrankJ. II.Series:Conferencereport (NationalBureauofEconomicResearch) HV4999.2.E25 1999 338.4'33629'0973-dc21 99-17554 CIP @Thepaperusedinthispublicationmeetstheminimumrequirementsof theAmericanNationalStandardforInformationSciences-Permanence ofPaperforPrintedLibraryMaterials,ANSIZ39.48-1992. NationalBureauofEconomicResearch Officers JohnH.Biggs,chainnan SusanColligan,corporatesecretary CarlF.Christ,vice-chainnan KellyHorak,controllerandassistant MartinFeldstein,presidentandchief corporatesecretary executiveofficer GerardineJohnson,assistantcorporate RobertMednick,treasurer secretary SamParker,chieffinancialofficer DirectorsatLarge PeterC.Aldrich GeorgeC.Eads MichaelH.Moskow ElizabethE.Bailey MartinFeldstein RudolphA.Oswald JohnH.Biggs StephenFriedman RobertT.Parry AndrewBrimmer GeorgeHatsopoulos PeterG.Peterson CarlF.Christ KarenN. Horn RichardN.Rosett DonR.Conlan JohnLipsky KathleenP.Utgoff KathleenB.Cooper LeoMelamed Marinav.N.Whitman DirectorsbyUniversityAppointment GeorgeAkerlof,California, Berkeley JoelMokyr,Northwestern JagdishBhagwati,Columbia AndrewPostlewaite,Pennsylvania WilliamC.Brainard,Yale NathanRosenberg,Stanford GlenG.Cain,Wisconsin HaroldT.Shapiro,Princeton FranklinFisher,MassachusettsInstitute CraigSwan,Minnesota ofTechnology DavidB.Yoffie,Harvard SaulH.Hymans,Michigan ArnoldZellner,Chicago MarjorieB.McElroy,Duke DirectorsbyAppointmentofOtherOrganizations MarcelBoyer,CanadianEconomics RobertMednick,AmericanInstituteof Association CertifiedPublicAccountants MarkDrabenstott,AmericanAgricultural John1.Siegfried,AmericanEconomic EconomicsAssociation Association WilliamC.Dunkelberg,NationalAssociation DavidA.Smith,AmericanFederationof ofBusinessEconomists LaborandCongressofIndustrial GailD.Fosler,TheConferenceBoard Organizations A.RonaldGallant,AmericanStatistical JoshS.Weston,CommitteeforEconomic Association Development RobertS.Hamada,AmericanFinance GavinWright,EconomicHistoryAssociation Association DirectorsEmeriti MosesAbramovitz FranklinA.Lindsay JamesJ.O'Leary GeorgeT.Conklin,Jr. PaulW.McCracken BertSeidman ThomasD.Flynn GeoffreyH.Moore EliShapiro LawrenceR.Klein Sincethisvolumeisarecordofconferenceproceedings,ithasbeenexemptedfromtherules governingcriticalreviewofmanuscriptsbytheBoardofDirectorsoftheNationalBureau (resolutionadopted8June1948,asrevised21 November1949and20April 1968). Contents Acknowledgments xi Introduction 1 FrankJ. Chaloupka,MichaelGrossman, WarrenK. Bickel, andHenrySaffer I. CIGARETTESMOKINGANDOTHERTOBACCOUSE 1. TobaccoTaxes,SmokingRestrictions, and TobaccoUse 15 RobertL. Ohsfeldt, RaymondG. Boyle, andEliI.Capilouto 2. The BehavioralEconomicsofSmoking 31 WarrenK. BickelandGregoryJ. Madden Comment(on chaps. 1and2): KennethE. Warner Comment(on chaps. 1and2): NeilE. Grunberg II. ALCOHOLUSE ANDABUSE 3. The Effects ofPrice ChangesonAlcohol ConsumptioninAlcohol-Experienced Rats 75 Jeffrey K. Sarbaum, SolomonW. Polachek, andNormanE. Spear 4. Delayed-RewardDiscountingin AlcoholAbuse 103 RudyE. VuchinichandCathyA. Simpson Comment(on chaps. 3 and4): MichaelE. Hilton Comment(on chaps. 3 and4):ThomasF. Babor vii viii Contents III. ILLICITDRUGUSE 5. TheDemandfor Cocaineand Marijuana byYouth 133 FrankJ. Chaloupka,MichaelGrossman, andJohnA.Tauras 6. Applying BehavioralEconomics to the ChallengeofReducing CocaineAbuse 157 StephenT. Higgins Comment(on chaps. 5and6): JonathanP. Caulkins Comment(on chaps. 5and6): DavidShurtleff IV. POLYDRUGUSE 7. DemographicDifferentialsin the Demand forAlcohol andIllicitDrugs 187 Henry SafferandFrankJ. Chaloupka 8. ABehavioralEconomicAnalysisofPolydrug AbuseinHeroinAddicts 213 NancyM. PetryandWarrenK. Bickel Comment(on chaps. 7and8):A. ThomasMcLellan Comment(on chaps. 7and8): MarkA. R. Kleiman V. SUBSTANCEABUSE ANDEMPLOYMENT 9. AreAlcoholicsinBadJobs? 251 DonaldS. KenkelandPingWang 10. Employmentas a DrugAbuse TreatmentIntervention:ABehavioral EconomicAnalysis 279 KennethSilvermanandEliasRobles Comment(on chaps. 9and10): JohnMullahy Comment(on chaps. 9and10): SharonM. Hall VI. SUBSTANCEUSE ANDINCOME 11. IncomeAlters the Relative Reinforcing Effects ofDrugand NondrugReinforcers 311 MarilynE. Carroll 12. DoesDrugUse CausePoverty? 327 RobertKaestner Comment(on chaps. 11 and12): ChristopherJ. Ruhm Comment(on chaps. 11 and12): StevenR. Hursh ix Contents Contributors 369 AuthorIndex 373 SubjectIndex 379

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Conventional wisdom once held that the demand for addictive substances like cigarettes, alcohol, and drugs was unlike that for any other economic good and, therefore, unresponsive to traditional market forces. Recently, however, researchers from two disparate fields, economics and behavioral psychol
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Conventional wisdom once held that the demand for addictive substances like cigarettes, alcohol, and drugs was unlike that for any other economic good and, therefore, unresponsive to traditional market forces. Recently, however, researchers from two disparate fields, economics and behavioral psychol

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