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Macroeconomic Aspects of Substance Abuse: Diffusion, Productivity and Optimal Control

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Abstract
This paper deals dynamically with macroeconomic aspects of widespread substance abuse with a reference to illicit drugs as an example. Substance-abuse impedes the productivity of the labour force and subsequently economic growth. The labour force is divided into non-using and therefore fully productive workers, a number of whom are employed by the government in drug-control activities, and drug users who are only partially productive. An efficient management of the nation's portfolio of workers is taken to be the trajectory of drug-control that maximises the present value of the stream of disposable national incomes.

Suggested Citation

  • Levy, Amnon & Neri, Frank, 2004. "Macroeconomic Aspects of Substance Abuse: Diffusion, Productivity and Optimal Control," Economics Working Papers wp04-22, School of Economics, University of Wollongong, NSW, Australia.
    • Handle: RePEc:uow:depec1:wp04-22
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    File URL: http://www.uow.edu.au/content/groups/public/@web/@commerce/@econ/documents/doc/uow012183.pdf
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    References listed on IDEAS

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    1. W. Davis Dechert & Kazuo Nishimura, 2012. "A Complete Characterization of Optimal Growth Paths in an Aggregated Model with a Non-Concave Production Function," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 237-257, Springer.
    2. Skiba, A K, 1978. "Optimal Growth with a Convex-Concave Production Function," Econometrica, Econometric Society, vol. 46(3), pages 527-539, May.
    3. C. Peter Rydell & Jonathan P. Caulkins & Susan S. Everingham, 1996. "Enforcement or Treatment? Modeling the Relative Efficacy of Alternatives for Controlling Cocaine," Operations Research, INFORMS, vol. 44(5), pages 687-695, October.
    4. Axel Klein, 1999. "Nigeria & the drugs war," Review of African Political Economy, Taylor & Francis Journals, vol. 26(79), pages 51-73.
    5. Gernot Tragler & Jonathan P. Caulkins & Gustav Feichtinger, 2001. "Optimal Dynamic Allocation of Treatment and Enforcement in Illicit Drug Control," Operations Research, INFORMS, vol. 49(3), pages 352-362, June.
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    Cited by:

    1. Akao, Ken-Ichi & Kamihigashi, Takashi & Nishimura, Kazuo, 2011. "Monotonicity and continuity of the critical capital stock in the Dechert–Nishimura model," Journal of Mathematical Economics, Elsevier, vol. 47(6), pages 677-682.
    2. Levy, Amnon, 2006. "A Theory of Relative Deprivation and Myopic Addiction," Economics Working Papers wp06-20, School of Economics, University of Wollongong, NSW, Australia.
    3. Amnon Levy & João Faria, 2008. "Persistent high ambition and substance abuse: a rationalization of a vicious circle," Journal of Economics, Springer, vol. 94(3), pages 261-274, September.
    4. Grass, D., 2012. "Numerical computation of the optimal vector field: Exemplified by a fishery model," Journal of Economic Dynamics and Control, Elsevier, vol. 36(10), pages 1626-1658.
    5. Liang, Jian & Alexeev, Sergey, 2023. "Harm reduction or amplification? The adverse impact of a supervised injection room on housing prices," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    6. Levy, Amnon, 2008. "A theory of entrenched socioeconomic deprivation and addiction to strong mind-altering substances," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 1756-1767, October.
    7. Levy, Amnon & Faria, João Ricardo, 2006. "Depression and Substance Abuse: A Rationalization of a Vicious Circle," Economics Working Papers wp06-16, School of Economics, University of Wollongong, NSW, Australia.

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    More about this item

    Keywords

    Substance abuse; labour productivity; national income; optimal control;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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