Disrupting Drug Markets: The Effects of Crackdowns on Rogue Opioid Suppliers
ERID Working Paper Number 313
51 Pages Posted: 23 Jan 2023 Last revised: 31 May 2024
Date Written: October 31, 2022
Abstract
This paper estimates the impacts of doctor crackdowns on the quantity demanded of prescription opioids, across-market substitution, and across-product substitution. Exploiting plausibly exogenous variation in the timing and location of administrative actions, I find that cracking down on a single doctor decreases county-level opioid dispensing by 10%. This decline persists across space and grows over time. Additionally, significant heroin substitution occurs, yet overall overdose mortality decreases. These results highlight a critical tradeoff policymakers should consider with targeted crackdowns: reductions in the flow of new users must be balanced against the harm that arises when existing users substitute to more dangerous drugs.
Note:
Funding Information: None to declare.
Declaration of Interests: None to declare.
Keywords: drug epidemic, opioids, enforcement
JEL Classification: H12, I10, K42
Suggested Citation: Suggested Citation