TY  - RPRT
        AU  - Deiana, Claudio
AU  - Giua, Ludovica
AU  - Nistico, Roberto
        TI  - The Economics behind the Epidemic: Afghan Opium Price and Prescription Opioids in the US
        PY  - 2019/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 12872
        UR  - https://www.iza.org/publications/dp12872
        AB  - We investigate the effect of variations in the price of opium in Afghanistan on per capita dispensation of prescription opioids in the US. Quarterly county-level data for 2003-2016 indicate that reductions in opium prices significantly increase the quantity of opioids prescribed. The increase involves natural and semi-synthetic but not fully synthetics opioids, therefore suggesting that the effect is moderated by the amount of opium contained in the products. While this evidence could suggest a pass-through of lower production costs to retail prices, boosting patients' demand for opioids, we fail to detect significant effects of changes in retail prices on per capita dispensation. Moreover, firm-level analysis reveals that advertising expenses of opioid producers increase following opium price declines and so do their stock prices and profits. Overall, our findings suggest that supply-side economic incentives might have played an important role in the opioid epidemic.
        KW  - opium price
KW  - drugs
KW  - prescription opioids
KW  - supply-side economic incentives
        ER  -