In recent years, the federal government has begun to require state agencies
to allocate drug prevention resources according to the needs of local comm
unities. The methods by which this is to be accomplished have not been desc
ribed, and most published social indicator studies in the field of drug abu
se research have used county-level data which are too insensitive to local
needs to be of use in resource allocation decisions. The present study desc
ribes a needs assessment in drug abuse prevention in the state of New Jerse
y using municipal-level social indicator data. In addition, it examines the
extent to which the resource allocation of one state prevention agency can
be predicted by the municipal-level social indicators. Thirty-six social i
ndicators pertaining to 508 municipalities were used in the study, and data
were analyzed using principal component analysis and hierarchical regressi
on analysis. Five factors were extracted from the principal component analy
sis, two of which clearly describe "high risk" municipalities and one of wh
ich clearly describes "low risk" municipalities. The regression analysis sh
owed that these factors explained very little of the variance in the state
agency's drug prevention spending. The study shows that social indicators c
an be used to distinguish between different levels of need for drug prevent
ion services at a municipal level, and that these data can be used to infor
m decisions concerning resource allocation.