Disrupting Drug Markets: The Effects of Crackdowns on Rogue Opioid Suppliers
ERID Working Paper Number 313
44 Pages Posted: 23 Jan 2023 Last revised: 26 Mar 2024
Date Written: October 31, 2022
Abstract
From 1999 to 2021, nearly 650,000 Americans died from an overdose involving an opioid. In this paper, I estimate the impacts of enforcement against doctors on the supply of prescription opioids, black-market prices, and health. Exploiting plausibly exogenous variation in the timing and location of administrative actions, I find that cracking down on a single doctor decreases county-level opioid dispensing by 10%. This decline in legal supply persists across space and grows over time. Additionally, diverted opioid pill prices increase and significant heroin substitution occurs, yet overall overdose mortality decreases. The declines in mortality are strongest among young and prime-aged men. These results highlight a critical tradeoff policymakers should consider when attempting to address drug abuse through targeted supply-side enforcement: reductions in the flow of new users must be balanced against the harm that arises when existing users substitute to more dangerous drugs.
Note:
Funding Information: None to declare.
Declaration of Interests: None to declare.
Keywords: enforcement, drug epidemic, overdose, spatial crime dynamics
JEL Classification: H12, I10, K42
Suggested Citation: Suggested Citation