THE DEMAND FOR COCAINE BY YOUNG-ADULTS - A RATIONAL ADDICTION APPROACH

This paper applies the rational addiction model to the demand for coca ine by young adults in the Monitoring the Future panel. The price of c ocaine is added to this survey from the Drug Enforcement Administratio n's System to Retrieve Information from Drug Evidence. Results suggest that annual participation and frequency of use given participation ar e negatively related to the price of cocaine. in addition, current par ticipation (frequency) is positively related to past and future partic ipation (frequency). The long-run price elasticity of total consumptio n (participation multiplied by frequency given participation) of - 1.3 5 is substantial. (C) 1998 Elsevier Science B.V. All rights reserved.