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by Henry Saffer Frank Chaloupka National
Bureau of Economic Research, Inc. The purpose of this paper
is to estimate demographic differentials in alcohol and illicit drug use,
participation, own price effects and cross price effects. This paper uses
a data set of over 49,000 individuals from the National Household Survey
of Drug Abuse and links drug and alcohol prices and policies to the individual
records. The size of this data set makes it possible to estimate use,
participation and demand curves for specific demographic groups. Public
policies designed to reduce substance abuse have been oriented towards
increasing the price of alcohol and illicit drugs. Little, however, is
known about the relative responsiveness of various demographic groups
to these policies. The data show that racial and ethnic minorities consume
more cocaine, but consume less or equal amounts of alcohol, marijuana
and heroin than the total population. The results also show a consistent
pattern of negative own price effects for alcohol and illicit drugs and
complimentarity between alcohol and illicit drugs. The own price effects
did not differ substantially between demographic groups suggesting that
price policies have a similar effect on all demographic groups. The pattern
of complimentarity between alcohol and illicit drugs suggest that alcohol
taxes also reduce drug use.
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