The Downward Spiral

61 Pages Posted: 29 Mar 2022

See all articles by Jeremy Greenwood

Jeremy Greenwood

University of Pennsylvania

Nezih Guner

Centre for Monetary and Financial Studies (CEMFI)

Karen A. Kopecky

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Date Written: February 2022

Abstract

There have been more than 500,000 opioid overdose deaths since 2000. To analyze the opioid epidemic, a model is constructed where individuals, with and without pain, choose whether to misuse opioids knowing the probabilities of addiction and dying. These odds are functions of opioid use. Markov chains are estimated from the US data for the college and non-college educated that summarize the transitions into and out of opioid addiction as well as to a deadly overdose. A structural model is constructed that matches the estimated Markov chains. The epidemic's drivers, and the impact of medical interventions, are examined

Keywords: Addiction, college/non-college educated, deaths, fentanyl, Markov chain, medical interventions, opioids, OxyContin, pain, prices

JEL Classification: D11, D12, E13, I12, I14, I31, J11, J17

Suggested Citation

Greenwood, Jeremy and Guner, Nezih and Kopecky, Karen A., The Downward Spiral (February 2022). CEPR Discussion Paper No. DP17033, Available at SSRN: https://ssrn.com/abstract=4069821

Jeremy Greenwood (Contact Author)

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

Nezih Guner

Centre for Monetary and Financial Studies (CEMFI) ( email )

Casado del Alisal 5
28014 Madrid
Spain

Karen A. Kopecky

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

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