Economics

Jeffrey Miron and Pedro Aldighieri

Chapter 11 in Research Handbook on Drugs and Society, 2026, pp 124-135 from Edward Elgar Publishing

Abstract: Economics offers insights into drug consumption and societal reactions. While the rational agent framework helps analyze drug consumption decisions, it may not account for irrational behaviors like addiction. Extensions of the rational agent framework, such as incorporating time-inconsistent preferences, can provide a more nuanced understanding of drug consumption. Moreover, economics sheds light on the externalities associated with drug use, including impacts on public health and safety. In addition to a normative analytical perspective, economics provides robust tools with which to analyze the costs and benefits of policy interventions. By examining shifts in the supply and demand for drugs, as well as the broader impacts on health, violence, and corruption, policymakers can make informed decisions about drug prohibition through an economic lens.

Keywords: Drug policy; Rational addiction; Economics; Prohibition; Cost–benefit analysis (search for similar items in EconPapers)
Date: 2026
ISBN: 9781802209136
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