Another interesting paper from the NBER meetings.
In A Critique of the Estimates of the Economic Cost of Drug Abuse, Jeffrey Miron attacks the estimates produced by the US Office of National Drug Control Policy on the costs of drug abuse (US$143 billion in 2001). He argues that:
- the estimates of lost earnings are overstated – since the coefficient on drug use in wage regressions is positive more often than negative (apparenly people aren’t sure why – one possibility is that drug use is an indicator of risk-taking, which is rewarded in the labour market)
- the estimate of the drug-induced crime cost is overstated, since it assumes that the correlation between drug use and crime is all causal (ie. that the guys who are taking drugs and breaking into houses would not break into houses if they weren’t taking drugs)
- it costs incarceration and policing – yet…
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Utopia, you are standing in it! 
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