December 2002

Grant Results

SUMMARY

In 1997, the National Bureau of Economic Research, Cambridge, Mass., convened the first meeting of two groups of researchers who study substance use and abuse — those working in the fields of econometrics and behavioral psychology.

Economists studying the demand for legal and illicit substances are generally unaware of the innovative research being conducted by behavioral psychologists that merges concepts from microeconomic theory with behavioral research methods. Similarly, behavioral researchers are generally unfamiliar with the econometric literature on substance use and abuse.

Key Results

  • On March 27–28, 1997, the bureau sponsored a conference in Cambridge, Mass., on "The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research."

    Two papers, one each from the econometrics and behavioral psychology perspectives, were presented on each of six different topics. Two discussants, typically one economist and one non-economist, also commented on every topic, pointing out the similarities and the differences in the approaches taken by the two disciplines. Among the key themes of the 12 papers (see the Bibliography for a complete list of authors and titles) are the following:
    • Cigarette smoking and other tobacco use.
    • Alcohol use and abuse.
    • Illicit drug use.
    • Polydrug use.
    • Substance abuse and employment.
    • Substance abuse and income.
  • A full set of revised papers and discussant comments were published as a book by the University of Chicago Press entitled The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research.

Funding
The Robert Wood Johnson Foundation (RWJF) provided $86,940 in grant support for the effort between October 1996 and March 1998.

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THE PROJECT

Economists studying the demand for legal and illicit substances are generally unaware of the innovative research being conducted by behavioral psychologists that merges concepts from microeconomic theory with behavioral research methods. Similarly, behavioral researchers are generally unfamiliar with the econometric literature on substance use and abuse.

RWJF granted $86,940 to the National Bureau of Economic Research — a Cambridge, Mass.-based nonprofit research organization dedicated to promoting a greater understanding of how the economy works — to address the knowledge gap between the two fields by convening the first conference to bring together both groups of researchers and then publish papers presented at the conference. An additional goal was to encourage multidisciplinary collaborations that would extend the frontiers of research on substance use and abuse.

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RESULTS

This grant accomplished the following:

  • On March 27–28, 1997, the bureau sponsored a conference in Cambridge, Mass., on "The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research." Two papers, one each from the econometrics and behavioral psychology perspectives, were presented on each of six different topics. Two discussants, typically one economist and one non-economist, also commented on every topic, pointing out the similarities and the differences in the approaches taken by the two disciplines. There were also opportunities for broader discussion among the participants. Among the key themes of the 12 papers (see the Bibliography for a complete list of authors and titles) are the following:
    • Cigarette smoking and other tobacco use. An econometric analysis confirmed that higher cigarette taxes and restrictions on smoking in the workplace and public spaces reduce the likelihood of smoking. A presentation on behavioral economic analyses of smoking confirmed the inverse relationship between price and consumption.
    • Alcohol use and abuse. In a joint paper, an economist and a psychologist reported on a rat study, confirming that alcohol consumption is a habit-forming or addictive behavior. A paper with a behavioral focus reviewed experimental studies that considered the rationality of alcohol consumption.
    • Illicit drug use. Two papers focused on the demand for illicit drugs, notably cocaine, and marijuana. An econometric analysis of youth drug use concluded that, as with alcohol and cigarettes, high prices and drug control policies can both reduce consumption. A review of behavioral experiments confirmed that higher prices reduce cocaine use and described the implications for clinical treatment of drug use and abuse.
    • Polydrug use. An econometric review of the effects of alcohol, marijuana, cocaine, and heroin prices on demand found that price increases for one substance sometimes reduced use not only of that substance but of others as well. The researchers found little evidence of differences in price sensitivity based on race, age, or gender. A presentation on behavioral economic research supported some of those findings while contradicting others.
    • Substance abuse and employment. A paper by two economists examined the impact of the drinking choices made by young adults on their future jobs and lifetime earnings, while behavioral psychologists considered the potential for using employment as a mechanism to enhance the success of drug treatment programs.
    • Substance abuse and income. A paper from the econometric perspective confirmed that preferences between using drugs and not using drugs change as income increases and that an inverse relationship exists between price and drug use. Another analysis supported the hypothesis that increased cocaine and marijuana use significantly increases the probability of being poor.
  • All of the papers presented at the conference were edited and published as part of the bureau's working paper series in the late winter/early spring of 1998. Particular attention was given to minimizing the use of jargon so that the papers could be as accessible as possible to a multidisciplinary audience.
  • The full set of revised papers and discussant comments were published as a book by the University of Chicago Press entitled The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research.

Communications

The University of Chicago Press printed 1,900 copies of The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research, of which some 1,100 had been disseminated as of January 2001. Abstracts of the bureau's working paper series can be found online; the full papers also can be ordered online (see the Bibliography for details).

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AFTER THE GRANT

This project concluded with the end of the grant, but conference participants have continued multidisciplinary research efforts on a number of multidisciplinary research and publications projects. In one example, a behavioral psychologist began working with an economist to undertake a more formal econometric analysis of behavioral data. The project director believes that recently published research shows that some of the ideas of behavioral psychologists are making their way into the econometric analyses of conference attendees.

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GRANT DETAILS & CONTACT INFORMATION

Project

Conference and Publication on Economic Studies of Substance Use and Abuse

Grantee

The National Bureau of Economic Research (Cambridge,  MA)

  • Amount: $ 86,940
    Dates: October 1996 to March 1998
    ID#:  029421

Contact

Frank J. Chaloupka IV, Ph.D.
(630) 801-0829
fjc@uic.edu

Web Site

http://www.nber.org

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Books

Chaloupka FJ, et al. The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research. Chicago, Ill.: the University of Chicago Press, 1999.

Reports

Working paper series, located online:

  • Bickel WK and Madden GJ. "The Behavioral Economics of Smoking." Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Carroll ME. "Income Alters the Relative Reinforcing Effects of Drug and Nondrug Reinforcers." Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Chaloupka FJ, Grossman M and Tauras JA. "The Demand for Cocaine and Marijuana by Youth." Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Higgins ST. "Applying Behavioral Economics to the Challenge of Reducing Cocaine Use." Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Kaestner R. "Does Drug Use Cause Poverty?" Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Kenkel DS and Wang P. "Are Alcoholics in Bad Jobs?" Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Ohsfeldt RL, Boyle RG and Capilouto EI. "Tobacco Taxes, Smoking Restrictions and Tobacco Use." Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Petry NM and Bickel WK. "A Behavioral Economic Analysis of Polydrug Abuse in Hero in Addicts." Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Saffer H and Chaloupka FJ. "Demographic Differentials in the Demand for Alcohol and Illicit Drugs." Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Sarbaum JK, Polachek SW and Spear NE. "The Effect of Price Changes on Alcohol Consumption in Alcohol-Experienced Rats." Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Silverman K and Robles E. "Employment as a Drug Treatment Intervention: A Behavioral Economic Analysis." Cambridge, Mass.: the National Bureau of Economic Research, 1998.
  • Vuchinich RE and Simpson CA. "Delayed-Reward Discounting in Alcohol-Abuse." Cambridge, Mass.: the National Bureau of Economic Research, 1998.

Sponsored Conferences

"The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research," March 27–28, 1997, Cambridge, Mass. Six panels were held, with papers presented in each.

Panel Topics and Papers

  • "Cigarette Smoking and Other Tobacco Use."
    • Hosed RL, Boyle RG and Copilot EI, "Tobacco Taxes, Smoking Restrictions and Tobacco Use."
    • Bickel WK and Madden GJ, "The Behavioral Economics of Smoking."
  • "Alcohol Use and Abuse."
    • Sarcasm JK, Poacher SW and Spear NE, "The Effect of Price Changes on Alcohol Consumption in Alcohol-Experienced Rats."
    • Vuchinich RE and Simpson CA, "Delayed-Reward Discounting in Alcohol-Abuse."
  • "Illicit Drug Use."
    • Chaloupka FJ, Grossman M and Taurasm JA, "The Demand for Cocaine and Marijuana by Youth."
    • Higgins ST, "Applying Behavioral Economics to the Challenge of Reducing Cocaine Use."
  • "Polydrug Use."
    • Saffer H and Chaloupka FJ, "Demographic Differentials in the Demand for Alcohol and Illicit Drugs."
    • Petry NM and Bickel WK, "A Behavioral Economic Analysis of Polydrug Abuse in Heroin Addicts."
  • "Substance Abuse and Employment."
    • Kenkel DS and Wang P, "Are Alcoholics in Bad Jobs?"
    • Silverman K and Robles E, "Employment as a Drug Treatment Intervention: A Behavioral Economic Analysis."
  • "Substance Abuse and Income."
    • Carroll ME, "Income Alters the Relative Reinforcing Effects of Drug and Nondrug Reinforcers."
    • Kaestner R, "Does Drug Use Cause Poverty?"

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Report prepared by: Jeff Bradley
Reviewed by: Karyn Feiden
Reviewed by: Robert Crum
Program Officer: C. Tracy Orleans

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