| |
|
|
IZA
|
|
|
The Economics behind the Epidemic: Afghan Opium Price and Prescription Opioids in the US
by
Claudio Deiana, Ludovica Giua, Roberto Nistico
(December 2019)
forthcoming as 'Opium Price Shocks and Prescription Opioids in the US' in: Oxford Bulletin of Economics and Statistics
Abstract:
We investigate the effect of variations in the price of opium in Afghanistan on per capita dispensation of prescription opioids in the US. Quarterly county-level data for 2003-2016 indicate that reductions in opium prices significantly increase the quantity of opioids prescribed. The increase involves natural and semi-synthetic but not fully synthetics opioids, therefore suggesting that the effect is moderated by the amount of opium contained in the products. While this evidence could suggest a pass-through of lower production costs to retail prices, boosting patients' demand for opioids, we fail to detect significant effects of changes in retail prices on per capita dispensation. Moreover, firm-level analysis reveals that advertising expenses of opioid producers increase following opium price declines and so do their stock prices and profits. Overall, our findings suggest that supply-side economic incentives might have played an important role in the opioid epidemic.
Text: See Discussion Paper No. 12872 
|
| |
|
|
|
|