Economics of youth drug use, addiction and gateway effects

The use of illicit drugs by American youth rose dramatically during the 199 0s. Reducing these trends is an important policy objective. However, for po licies to be effective it is important to understand the Key causal links t hat lead to substance use and abuse. Policy makers must understand whether attempts to reduce the demand for one drug have impacts on the current and future use of other drugs. This paper overviews an economic approach to mod eling drug use, addiction and gateway effects, emphasizing the potential of this method for identifying causal links in consumption. The paper demonst rates how this multi-substance theory of drug use leads to empirical specif ications that can identify the impact of consumption of one drug on the con temporaneous and future consumption of other drugs. This is followed by a d iscussion of what types of data would be needed to estimate these effects.