Opioid misuse claimed 128 American lives a day in 2018 and was estimated to cost more than $500 billion annually. Those numbers have continued to rise. To work toward solving a public health crisis of this magnitude, scholars need to use tools from multiple disciplines – including economics.
In a new NBER working paper, “Review of Economic Studies on the Opioid Crisis,” Johanna Catherine Maclean (Temple University), Justine Mallatt (U.S. Bureau of Economic Analysis), Christopher J. Ruhm (University of Virginia), and Kosali Simon (Indiana University O’Neill School) analyze the origins and consequences of the opioid crisis through an economic lens. Their paper summarizes contributions from economic research, including work that looks at supply- and demand-side factors affecting opioid addiction, labor market effects of the crisis, related demographic trends, and unintended policy consequences.
“Economists can help by using rich data to study things like incentives and spillover effects,” said Kosali Simon, Herman B Wells Endowed Professor and Associate Vice Provost for Health Sciences. “What can health insurance claims data tell us about the effectiveness of prescription drug monitoring programs? How does reducing the number of opioid prescriptions affect demand for harmful substitutes, like heroin and fentanyl? These are the types of causal relationships economists are trained to look for.”
The authors point to areas that need further study, including the effects of the COVID-19 pandemic and the relationship of the opioid epidemic to other drug problems in the U.S. They also encourage their fellow economists to create taxonomies that could help researchers more easily compare different policy approaches.
Their research is being considered for publication in the Oxford Research Encyclopedia of Economics and Finance. Read the working paper, part of IU’s Responding to the Addictions Crisis Grand Challenges initiative, at NBER (here).