Journalism by the Numbers

It’s terrific to see journalists doing investigative work to dig out interesting numbers. Two recent examples.

  • On the weekend, Michael Duffy (not, not that one) estimated for the SMH that Australian drug prohibition costs A$4.7 billion annually. Although it’s in line with Jeffrey Miron’s estimates for the US, my guess is that this is a tad high, since it doesn’t take into account the decline in participation and productivity that would be likely to accompany higher usage rates of hard drugs such as heroin.
  • In the NYT, Tara Bernard and Ron Lieber estimate the lifetime cost of being gay at US$41,196-$467,562 per couple. However, this omits the impact on earnings (from career choice and discrimination), which US studies find to be negative for gay men, and positive for lesbian women.
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5 Responses to Journalism by the Numbers

  1. Michael Duffy says:

    Maybe, Andrew, although I’m not sure if most drug use is as debilitating as you assume. And maybe the factor you mention would be offset by the many drug users and dealers now in prison who would return to the workforce?

  2. Though that NYT number says more about the absurdity of the US system in paying health benefits through employers than about the costs of being gay.

    And it is assuming time out of the workforce for children, an unlikely assumption for most gay men.

    I suspect that in Australia being gay is on average a net positive for personal disposable income, with the main negatives being non-financial.

  3. Andrew Leigh says:

    Michael, thanks for taking the time to respond. I’m not a drug expert, but I thought that the best research in this field found a disemployment effect. For example, Jeff deSimone’s paper in the Journal of Labor Economics (gated version here) uses variation in prices (exactly the source that you’d want when thinking about legalisation) to identify a negative causal impact of use on employment.

    Since legalization would lower prices substantially, demand could be expected to rise quite a bit. My guess is that the impact of not incarcerating drug users would be smaller than this, but I admit to not knowing of any evidence on this point.

  4. free classifieds says:

    The modern history of drug regulation began 100 years ago with the enactment of laws prohibiting the smoking of opium. In Australia Opium was prohibited because it represented an amalgam of race, sex and fear.


  5. hc says:

    These types of vast cost estimates do cause shock and horror. But what are the effects of encouraging more use and new users as a result of the lower price? What is the counterfactual? To say that usage is non-problematic is not sensible given the vast drop in overdose deaths that accompanied the heroin drought in 2003. Amphetamines, cocaine, heroin and the other opiates are not safe drugs and it is sensible to maintain social prohibitions against their use. Cannabis is addictive and is implicated in the onset of psychosis. It is more harmful to the lungs than cigarettes and implicated in an increasing proportion of lung cancer deaths.

    Why stop current policies when they are so manifestly winning? Drug usage across a range of licit and illicit drugs is on the decline.

    Tax revenues are included as a component of welfare only to the extent they reduce consumer and producer surpluses. Excise taxes create deadweight losses and so foregone tax revenue should not be considered a cost of prohibition as in the Duffy analysis.

    Imprisonment costs are excessively high and monetary fines should replace imprisonment for drug users.

    I agree with Andrew that productivity would decline markedly with increased use of hard drugs but so too would health costs.

    Dr Wodak is a doctor who uses his position to support selling cannabis in post offices. He has an uncritical support for harm minimisation that would greatly increase health and other costs because he does not consider the effects of such policies in reducing user costs associated with drug use.

    His irresponsible and publicity-seeking views should be discounted by journalists and those concerned with formulating national drug policies.

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