Trading apples for oranges? Results of an experiment on the effects of Heroin and Cocaine price changes on addicts' polydrug use

Jofre-Bonet, M. & Petry, N. M. (2008). Trading apples for oranges? Results of an experiment on the effects of Heroin and Cocaine price changes on addicts' polydrug use. Journal of Economic Behavior & Organization, 66(2), pp. 281-311. doi: 10.1016/j.jebo.2006.05.002

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Abstract

This paper studies polydrug use patterns in heroin and cocaine addicts. We use data on two experiments to measure the elasticity of several addictive drugs with respect to heroin and cocaine prices. Own and cross price elasticities are estimated while controlling for non-price related sources of variance. The results indicate that heroin addicts have an inelastic demand for heroin, complement heroin consumption with cocaine, marijuana, and alcohol and substitute Valium and cigarettes. Additionally, heroin addicts’ cocaine consumption is inelastic, and they substitute cocaine with marijuana and Valium, and complement it with alcohol. Cocaine addicts have an elastic demand for cocaine; they complement cocaine with heroin and alcohol and substitute it with marijuana and Valium. Cocaine addicts’ demand for heroin is inelastic; and, for this group, alcohol is a complement to heroin while cocaine, marijuana and Valium are substitutes to heroin.

Item Type: Article
Additional Information: NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Economic Behavior & Organization. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Economic Behavior & Organization, Volume 66, Issue 2, May 2008, Pages 281–311, http://dx.doi.org/10.1016/j.jebo.2006.05.002
Uncontrolled Keywords: Economics of addiction; Own-price elasticity; Cross-price elasticity; Almost Ideal Demand System
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HM Sociology
Divisions: School of Social Sciences > Department of Economics
Related URLs:
URI: http://openaccess.city.ac.uk/id/eprint/5412

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