Arbeitspapier
The Economics behind the Epidemic: Afghan Opium Price and Prescription Opioids in the US
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.
- Language
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Englisch
- Bibliographic citation
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Series: IZA Discussion Papers ; No. 12872
- Classification
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Wirtschaft
Analysis of Health Care Markets
Health Behavior
Health: Government Policy; Regulation; Public Health
Chemicals; Rubber; Drugs; Biotechnology; Plastics
- Subject
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prescription opioids
drugs
opium price
supply-side economic incentives
- Event
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Geistige Schöpfung
- (who)
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Deiana, Claudio
Giua, Ludovica
Nistico, Roberto
- Event
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Veröffentlichung
- (who)
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Institute of Labor Economics (IZA)
- (where)
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Bonn
- (when)
-
2019
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Deiana, Claudio
- Giua, Ludovica
- Nistico, Roberto
- Institute of Labor Economics (IZA)
Time of origin
- 2019
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Prescription opioids and new business establishments
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“Opioids are opioids” – A phenomenographic analyses of physicians’ understanding of what makes the initial prescription of opioids become long-term opioid therapy
Bandits, borderlands and opium wars: Afghan state-building viewed from the margins
An inevitable wave of prescription drug monitoring programs in the context of prescription opioids: pros, cons and tensions
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The Intended and Unintended Effects of Opioid Policies on Prescription Opioids and Crime
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