By Eric Crampton 12/03/2018


Suppose for a moment that addicts are rational and that we’re really in a Becker-Murphy world.

What happens in that world if a new technology makes it safer to consume an addictive product?
If you’re overdosing on opioids, Naloxone can save your life. The easier is access to Naloxone, the less likely addicts are to die if they have an overdose. Preventing death is good.
If we’re in a rational addiction framework, net effects on mortality will be lower than you might have thought though. The costs of taking up an addictive good go down, so more people will choose the addictive consumption path. The optimal quantity consumed on that path should be higher as well where the risks are somewhat abated. Addicts would have less need to build in safety margins against higher than expected potency, for example.
Basically the A curve in the model shifts up. You then get an unstable low-consumption equilibrium at a lower amount of consumption than was previously the case, and a stable high-consumption equilibrium at a higher level than used to be the case.
None of that says that improving access to Naloxone is a bad thing. It just says that, depending on all the relevant elasticities, you could easily see increases in consumption and increases in the number of consumers. Effects on overall mortality – hard to say. The number of overdoses will go up, but a higher fraction of overdoses will be countered by Naloxone.
What does the evidence say? Naloxone access laws vary state-by-state in the US, so we can figure it out. And Jennifer Doleac and Anita Mukherjee did. What did they find?

Policymakers have multiple levers available to fight opioid addiction, and broadening
Naloxone access aims to directly address the most dire risk of opioid overdose: death. Naloxone can save lives and provide a second chance for addicted individuals to seek treatment, but access to this lifesaving drug may unintentionally increase opioid abuse by providing a safety net that encourages riskier use. This paper shows that expanding Naloxone access increases opioid abuse and opioid-related crime, and does not reduce opioid-related mortality. In fact, in some areas, particularly the Midwest, expanding Naloxone access has increased opioid-related mortality. Opioid-related mortality also appears to have increased in the South and most of the Northeast as a result of expanding Naloxone access.

Our findings do not necessarily imply that we should stop making Naloxone available to
individuals suffering from opioid addiction, or those who are at risk of overdose. They do imply that the public health community should acknowledge and prepare for the behavioral effects we find here. Our results show that broad Naloxone access may be limited in its ability to reduce the epidemic’s death toll because not only does it not address the root causes of addiction, but it may exacerbate them. Looking forward, our results suggest that Naloxone’s effects may depend on the availability of local drug treatment: when treatment is available to people who need help overcoming their addiction, broad Naloxone access results in more beneficial effects. Increasing access to drug treatment, then, might be a necessary complement to Naloxone access in curbing the opioid overdose epidemic.

They frame their work in terms of moral hazard, and don’t mention the Becker-Murphy model, but this is what we should expect out of a Becker-Murphy rational addiction model. The cost of consumption of an addictive good goes down, so consumption of it goes up.

It may seem surprising that drug users respond to incentives in a sophisticated way. One may think that drug users are poor decision-makers or that addiction makes rational choices impossible. Addiction surely clouds judgement and makes policy in this area difficult, but there is substantial evidence that even drug users respond to incentives. A large body of empirical evidence documents that the consumption of addictive substances is sensitive to prices. For example, increasing taxes on alcohol reduces alcohol consumption (Cook and Durrance, 2013). Alcohol abuse also responds favorably to increasing the likelihood of punishment, as seen in evaluations of the 24/7 Sobriety program (Kilmer et al., 2013). Hansen, Miller and Weber (2017) show that marijuana consumption is price inelastic in the short run, but quickly becomes price elastic, with consumers reducing their consumption in the face of higher marijuana taxes. And finally, Moore and Schnepel (2017) show that a massive reduction in the heroin supply in Australia resulted in a long-term reduction in heroin consumption among those using heroin at the time, due to a spike in the price of the drug. These findings suggest that, at least on the margin, drug abuse may be sensitive to non-monetary costs such as the risk of death.

Rationality-based models. They may not be woke, but they work. Read the whole thing. Or, for Doleac’s tweetstorm on the paper, check her feed here.