The central goal of this project is to use econometric methods to estimate the different behavioral characteristics of """"""""addicts"""""""" and """"""""casual users"""""""" of opium. Economic theories of addiction predict the existence of two distinct kinds of consumers, those who consume large amounts of the drug, or """"""""addicts,"""""""" and those who consume small amounts of the drug, or """"""""casual users."""""""" While there are rigorous econometric studies of the aggregate responses of groups of consumers of addictive substances to changes in income, price, and other economic variables, there exists no study to date that uses econometric methods to differentiate between """"""""addicts"""""""" and """"""""casual users."""""""" Because the sale of opium was legal and conducted by a government monopoly (the Opium Regie) in the Netherlands Indies in the early twentieth century, there exist unique and reliable aggregate statistics on prices, consumption, numbers of opium users, and a variety of other related economic data. The estimation of models of rational and myopic addiction using these data will provide inferences about the behavioral characteristics of two individual types of users, """"""""addicts"""""""" and """"""""casual users.""""""""
| Chandra, Siddharth (2007) Economic manifestations of opiate addiction: evidence from historical data from colonial Indonesia. Drug Alcohol Depend 90 Suppl 1:S69-84 |
