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Legalizing Drugs: Lessons From (and About) Economics

NCJ Number
138832
Journal
Milbank Quarterly Volume: 69 Issue: 4 Dated: (1991) Pages: 641-662
Author(s)
K E Warner
Date Published
1991
Length
32 pages
Annotation
Economic analysis has both potential and limitations for analyzing the impacts of drug legalization, but it cannot replace the ultimate need to rely on a political and bureaucratic decisionmaking process to address the challenging ethical, social, legal, and political issues that pervade the problem of drug abuse in the United States.
Abstract
Cost-benefit analysis and cost-effectiveness analysis have been used in many discussions of drug policy. They have many technical problems due to the difficulty of quantifying many factors. Nevertheless, cost-benefit analysis can increase awareness of important consequences that may have been overlooked. A more useful approach is to examine the price elasticity of demand, indicating drug abusers' responsiveness to changes in prices. This analysis would consider both how policies influence prices and how the prices of specific drugs affect their demand. Accomplishing this type of analysis is a complex task. The result would be a new perspective on the relative importance of selected variables rather than a clear conclusion about the desirability of drug legalization or an alternative policy. 37 references