Crime and drugs: an economic approach
Doyle, Chris, 1960- and Smith, Jennifer C. (1997) Crime and drugs: an economic approach. Working Paper. Coventry: University of Warwick, Department of Economics. (Warwick economic research papers.
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We present a model which ties together rational drug consumption, taxation, crime and other drug-related externalities. Drug control policy is addressed using an optimal tax framework. Consumption, possession and production of a drug may be prohibited, legalized or decriminalized. In all regimes illicit production of a drug may take place and drug-related crime occurs. We show that illicit drug production, the price elasticity of demand for a drug, the addictive nature of a drug, the effectiveness of drug enforcement strategies, and income distribution all influence optimal (second best) policy. Prohibition is contrasted with decriminalization and legalization, and where legalization yields a higher welfare than prohibition we show that this can be associated with greater drug-related crime and more drug addiction. The model is discussed in the context of US National Drug Control Strategy.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HV Social pathology. Social and public welfare|
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Crime -- Economic aspects, Drugs -- Law and legislation, Decriminalization, Drug legalization, Externalities (Economics)|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Number of Pages:||32|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
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