Disrupting Drug Markets: The Effects of Crackdowns on Rogue Opioid Suppliers

ERID Working Paper Number 313

48 Pages Posted: 23 Jan 2023 Last revised: 10 Mar 2023

See all articles by Adam Soliman

Adam Soliman

Duke University, Department of Economics

Date Written: October 31, 2022

Abstract

More than 564,000 Americans have died from an opioid-related overdose since 1999. In this paper, I estimate the impacts of enforcement actions taken against doctors on the supply of prescription opioids, black-market prices, and health outcomes. Exploiting plausibly exogenous variation in the timing and location of controlled substance license audits, I find that cracking down on a single doctor decreases county-level opioid dispensing by 10%. This decline in legal supply persists across space and time and results in a 44% increase in the black-market pill price. Significant heroin substitution also occurs, yet for each additional heroin overdose death, there are two fewer non-heroin opioid overdose deaths. The mortality declines are strongest among young and prime-aged men. These results highlight a novel tradeoff policymakers should consider when attempting to address drug abuse through supply-side interventions: 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: enforcement, drug epidemic, overdose, spatial crime dynamics

JEL Classification: H12, I10, K42

Suggested Citation

Soliman, Adam, Disrupting Drug Markets: The Effects of Crackdowns on Rogue Opioid Suppliers (October 31, 2022). ERID Working Paper Number 313, Available at SSRN: https://ssrn.com/abstract=4266020 or http://dx.doi.org/10.2139/ssrn.4266020

Adam Soliman (Contact Author)

Duke University, Department of Economics ( email )

419 Chapel Drive
213 Social Sciences Building, Box 90097
Durham, NC 27708-0097
United States

HOME PAGE: http://adamsoliman.github.io/

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