SFSU The War on Drugs Discussion

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I need these five questions answered. Using the link to an article I have provided The War on Drugs: Methamphetamine, Public Health, and Crime1) Dobkin and Nicosia identify four reasons why previous researchers have been unable find evidence that policies aimed at disrupting of the supply of drugs has had any effect on drug use or crime. In your own words, explain the challenges faced by these studies. How do Dobkin and Nicosia address these problems?2) Recall that the price elasticity of demand is the percentage change in demand associated with a percentage change in price (% Change in Demand / % Change in Price). Based on Dobkin and Nicosia’s evaluation of the impact of the supply shock to prices and their proxy for the change in meth use, what is their estimate of the price elasticity of the (street) user’s demand for meth? Does this seem large or small to you?3) In Figure 2, Dobkin and Nicosia separately plot price and purity (the quantity of methamphetamine in the meth) for buys of more or less than 30 grams. Why do they do this? Draw a supply and demand graph that is consistent with the observed change in price and the policy-initiated change in supply for buys of more or less than 30 grams. You can use the graphs here 4) Recall that the price elasticity of demand can be *roughly* represented by how steep the demand curve is. What do your graphs in question 3 tell you about the market participants at different stages of production? Is this consistent with estimated short and long run effects of the policy intervention on use?5) What is the impact of the supply intervention on crime? Why do you think that Dobkin and Nicosia find the results that they do?

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American Economic Review 2009, 99:1, 324–349
http://www.aeaweb.org/articles.php?doi=10.1257/aer.99.1.324
The War on Drugs:
Methamphetamine, Public Health, and Crime
By Carlos Dobkin and Nancy Nicosia*
In mid-1995, a government effort to reduce the supply of methamphetamine precursors successfully disrupted the methamphetamine market and interrupted
a trajectory of increasing usage. The price of methamphetamine tripled and
purity declined from 90 percent to 20 percent. Simultaneously, amphetaminerelated hospital and treatment admissions dropped 50 percent and 35 percent,
respectively. Methamphetamine use among arrestees declined 55 percent.
Although felony methamphetamine arrests fell 50 percent, there is no evidence
of substantial reductions in property or violent crime. The impact was largely
temporary. The price returned to its original level within four months; purity,
hospital admissions, treatment admissions, and arrests approached preintervention levels within eighteen months. (JEL I12, K42)
Reducing the consumption of illicit drugs and the adverse health and crime outcomes associated with their use is an important policy goal in the United States. The Office of National Drug
Control Policy (ONDCP) estimates that drug abuse cost the US economy $180 billion in 2002
(ONDCP 2004a).1 Approximately $16 billion of the cost is attributed to health care, $30 billion to
crime, and the remainder to reduced productivity.2 Despite substantial efforts to reduce the supply
of, and demand for, illicit drugs, use of certain drugs has continued to grow. Methamphetamine
is of particular concern due to the rapid increase in its use and the belief that it causes substantial
amounts of crime. In the early 1990s, methamphetamine use was concentrated among white
males in California and nearby Western states. Since then, it has spread both demographically
and geographically (Substance Abuse and Mental Health Services Administration (SAMHSA)
2001; National Institute on Drug Abuse (NIDA) 2002; L. D. Johnston, P. M. O’Malley, and J. G.
Bachman 2003). There has been particular concern in the media that this rapid expansion has
increased crime in affected communities.3
* Dobkin: Department of Economics, University of California, 1156 High St., Santa Cruz, CA 95064 (e-mail: cdobkin@ucsc.edu); Nicosia: RAND, 1776 Main St., M5W, PO Box 2138, Santa Monica, CA 90407-2138 (e-mail: nicosia@
rand.org). This research was funded by the National Institute on Drug Abuse (grant 1R03DA019016-01A1). We would
like to thank the Drug Enforcement Agency, the California Department of Alcohol and Drug Programs, the Office
of Statewide Health Planning and Development, and the California Department of Justice for providing us with the
data used in the paper. We would also like to thank David Card, Ken Chay, Rob Fairlie, Michael Grossman, Mireille
Jacobson, Lori Kletzer, Rosalie Pacula, Peter Reuter, Emmanuel Saez, Steve Suo, Jan van Ours, and three anonymous
referees for helpful comments and Reza Shabani for research assistance. Any mistakes are our own.
1
There has been criticism of such studies calculating the economic costs of drug abuse. Jeffrey A. Miron (2003b),
for example, notes that many crime-related costs are the result of prohibition rather than use.
2
ONDCP (2004a) also estimates that crime-related costs may exceed $100 billion if crime-related health and productivity costs are allocated to crime.
3
For examples, see: Fox Butterfield, “Across Rural America, Drug Casts a Grim Shadow,” New York Times,
January 4, 2004 (http://query.nytimes.com/gst/fullpage.html?res=9905E0DE1431F937A35752C0A9629C8B63, accessed
May 19, 2008); Steve Suo, “Unnecessary Epidemic., The Oregonian, October 3, 2004 (http://www.oregonlive.com/special/oregonian/meth/, accessed May 19, 2008); Jodi Wilgoren, “Too Late for Katie, Town Tackles a Drug’s Scourge,”
New York Times, February 10, 2005 (http://www.nytimes.com/2005/02/10/national/10meth.html?ex=1265691600&en
=4caa7d96f0ac5399&ei=5090&partner=rssuserland, accessed May 19, 2008).
324
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Dobkin and Nicosia: Methamphetamine, Public Health, and Crime
325
There are three primary approaches to reducing drug use: prevention, treatment, and enforcement. Prevention and treatment are demand-side interventions. Prevention takes the form of education and community action to limit new users, while treatment is intended to reduce demand
among current users. The bulk of government spending, however, is focused on enforcement
efforts targeting supply.4 While the efficacy of demand-side interventions can be evaluated
experimentally, assessing the effectiveness of enforcement is a more complicated problem. In
this paper, we examine the effectiveness of supply reduction strategies by evaluating how a particularly effective intervention in the market for methamphetamine precursors affected the price
and purity of methamphetamine, drug use, health, and crime. This intervention was atypical in
that it focused on restricting access to precursors, specifically ephedrine and pseudoephedrine,
rather than the removal of the end product drug from the market. In effect, the Drug Enforcement
Agency (DEA) was able to increase the cost of producing methamphetamine by making it more
difficult and costly to obtain the inputs needed for production. An examination of this type of
intervention is increasingly important as state and federal policymakers pursue legislation to
further restrict the availability of precursors.
Researchers have long noted the various difficulties in identifying the impact of supply-side
interventions (Jonathan P. Caulkins 2000; Yuehong Yuan and Caulkins 1998; John DiNardo
1993): 1) most interventions fail to create a substantial and abrupt supply shock; 2) lack of market
concentration results in supply-side interventions often having only a local effect; 3) the positive
correlation between supply and successful interventions confounds identification; and 4) spatial
and temporal data aggregation masks local or short-term impacts. As a result, it is difficult to
credibly estimate the price elasticity of consumption and the direct impact of enforcement on
health and crime.
This study advances the literature in four ways. First, the focus on a large and abrupt intervention makes it possible to directly measure the impact of enforcement on health and crime outcomes. Second, we examine the relationship between methamphetamine prices and purity and
a variety of outcomes in a setting where the source of the changes in price and purity is known.
Third, we examine how rapidly supply recovers after a substantial disruption. Fourth, we address
the impact of restricting access to legal precursors, a policy that is being pursued at the federal
and state level.
The Domestic Chemical Diversion Control Act (DCDCA) removed the record-keeping and
reporting exemption for distributors of single-entity ephedrine products and empowered the
DEA to deny or revoke a distributor’s registration without proof of criminal intent.5 In May 1995,
the DEA shut down two suppliers that appear to have been providing more than 50 percent of the
precursors used nationally to produce methamphetamine. This is probably the largest “supply”
shock that has occurred in any illegal drug market in the United States and was made possible by
the substantial concentration in the supply of methamphetamine precursors.
Prior to the intervention, methamphetamine prices and purity in California were stable and
use was increasing steadily. The intervention disrupted drug markets and dramatically reduced
methamphetamine use, adverse health outcomes, and arrests for drug possession and drug sale.
The price of methamphetamine soared from $30 to $100 per gram in the four months after the
intervention. The increase was substantial, but the price returned to $30 within four months of
the peak. The impact on purity was much longer-lived. Purity plummeted from 90 percent to less
than 20 percent but, after 18 months, it had recovered to 85 percent of its preintervention level.
The intervention caused a significant reduction in our proxy for methamphetamine consumption,
4
The budget for 2005 was allocated as follows: $2 billion for prevention, $4 billion for treatment, and $6 billion for
market disruption/enforcement (ONDCP 2004b).
5
Single entity ephedrine products are capsules or tablets whose only active ingredient is ephedrine.
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THE AMERICAN ECONOMIC REVIEW
March 2009
hospital admissions with a mention of amphetamine use, which declined by 50 percent. We
examine the possibility that substitution to other drugs substantially reduced the effect of the
intervention on overall drug use, but find little evidence of substitution. We also examine and
reject the possibility that those most likely to commit crimes experienced smaller reductions in
methamphetamine use than the general population.
In addition to the impact on our proxy for methamphetamine use, the intervention reduced the
incidence of adverse consequences associated with use. Methamphetamine-related drug treatment center admissions decreased by 35 percent, with no compensating increase in admission
for other drugs. The impact on crime was mixed. The share of arrestees testing positive for methamphetamine declined by 55 percent. Felony arrests for methamphetamine possession and sale
fell by 50 percent and misdemeanor arrests by 25 percent. Despite the strong correlation between
methamphetamine use and crime, however, we find no compelling evidence that the intervention
affected property or violent crime, with the possible exception of an increase in robberies.
The success of the intervention was the result of the considerable market concentration in the
distribution of precursors. But the impact of the intervention was largely temporary. The price of
methamphetamine returned to preintervention levels within four months, while purity, hospital
admissions, drug treatment admissions, and drug arrests recovered to near preintervention levels
over 18 months. The fairly rapid recovery of the methamphetamine market after the massive
intervention in the precursor market suggests that producers were eventually able to find suitable
substitutes.
The paper is organized into six sections. Section I provides background information on methamphetamine and a brief survey of the literature on supply-side interventions. Section II provides
a description of the legislation targeting methamphetamine precursors and the resulting interventions. Section III describes the datasets used in the analysis. Section IV outlines the estimation
strategy. In Section V, we examine the effect of the precursor intervention on methamphetamine
markets, drug use, health, and crime. Section VI concludes.
I. Background and Policy Significance
After marijuana, amphetamines are the most widely abused illicit drug worldwide (R. A.
Rawson, M. Douglas Anglin, and Walter Ling 2002). According to the World Health Organization,
amphetamine users outnumber both cocaine users (2.3 to 1) and heroin users (3.5 to 1).6
Methamphetamine use is rapidly growing in popularity in the United States. Methamphetamine
can be smoked, snorted, injected, or ingested orally to produce a release of high levels of dopamine into the brain and a reduction in dopamine uptake. Methamphetamine use results in feelings of pleasure, increased energy, and greater alertness that can last up to 12 hours. Chronic
abuse can lead to psychotic behavior, including hallucinations, paranoia, violent rages, mood disturbances, and suicidal thoughts (NIDA 2002). Cessation of use can result in depression, fatigue,
intense craving for methamphetamine, and aggression (ONDCP 2003). Research also indicates
that methamphetamine can have serious short- and long-term impacts on health. Some users
experience hallucinations (30 percent), paranoia (23 percent), chest pains (23 percent), depression (63 percent), and headaches (39 percent) (Rawson, Huber, Brethen, Obert, Gulati, Shoptaw,
and Ling 2002). A follow-up survey indicated that for some users physical and mental symptoms
6
The World Health Organization estimates that there are 35 million amphetamine users, 15 million cocaine users,
and 10 million heroin users (Rawson, Anglin, and Ling 2002). There may, however, be differential underreporting
across types of drugs.
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Dobkin and Nicosia: Methamphetamine, Public Health, and Crime
327
persisted for years.7 In addition, Sara L. Simon et al. (2002) found that methamphetamine use has
an impact on cognitive performance similar to cocaine use.
Despite amphetamines’ prevalence worldwide and its severe health effects, research in the
United States has concentrated largely on marijuana, cocaine, and heroin. The less extensive
research on methamphetamine is likely the result of its historically low prevalence outside
California and nearby Western states. There is significant evidence, however, that methamphetamine abuse is becoming a national problem. From 1992 to 2002, amphetamine-related treatment admission increased by 920 percent in the Midwest, 560 percent in the South, 455 percent
in the West, and 45 percent in the Northeast. Results from the National Survey on Drug Use and
Health indicate that 12 million Americans have used methamphetamine at some point in their
lives (SAMHSA 2005). In addition, the majority of county law enforcement agencies now report
methamphetamine as their primary drug problem (National Association of Counties 2005). The
geographic expansion has been accompanied by a demographic shift. In the early 1990s, methamphetamine use had been concentrated among adult white males, but use is now increasing
among women and Hispanics (NIDA 2002).
Although the literature on methamphetamine is not as extensive as the literature on cocaine
and heroin, there is some evidence that methamphetamine use has substantial negative health
and social costs and that interventions aimed at increasing the price of methamphetamine have
the potential to reduce health costs. William Rhodes et al. (Abt Associates) (2001) find a strong
negative correlation between methamphetamine prices and consumption among arrestees: a 1
percent price increase reduces consumption by approximately 1.4 percent. The elasticity suggests
that methamphetamine use is more price-sensitive than cocaine and heroin use.8 If this estimate
can be interpreted causally, then a reduction in precursor availability that significantly increases
prices should reduce methamphetamine consumption and consequently the adverse health outcomes and crime that result from consumption. James K. Cunningham and Lon-Mu Liu (2003a,
2005) examine the implementation of legislation targeting methamphetamine precursors on hospital admissions and drug arrests. They find that three of the four legislative changes are associated with reductions in amphetamine-related hospital admissions and methamphetamine-related
arrests.9 In the United States, the media have devoted considerable attention to the link between
methamphetamine use and crime (Butterfield 2004; Suo 2004; Wilgoren 2005), but there is limited empirical evidence. A recent survey of 655 methamphetamine users in Queensland found
that a substantial share had committed property and violent crimes (Mark Lynch et al. 2003).
Determining how much a reduction in methamphetamine availability reduces adverse health
outcomes and crime is one of the main goals of this study.
Although the United States relies heavily on enforcement, there is considerable debate over the
merits of supply-side interventions. Early empirical evidence suggests that supply-side strategies
may be less cost-effective than treatment strategies (C. P. Rydell and Susan Everingham 1994).
A number of studies have failed to find substantial benefits from enforcement efforts. DiNardo
(1993) finds that enforcement does not have a significant impact on cocaine prices. Contrary
to expectations regarding enforcement and drug prices, Yuan and Caulkins (1998) document
7
The physical effects became less common over time, but the mental effects remained at initial levels.
Recent evidence estimates a 1 percent (or less) reduction for a 1 percent price increase for heroin and cocaine
(Frank J. Chaloupka and Rosalie Liccardo Pacula 2000). However, the price elasticity for methamphetamine in the Abt
study was estimated using prices and use among a nonrandom sample of arrestees in five cities and so is unlikely to be
comparable to results in the general population.
9
Cunningham and Liu (2003a) examine legislation passed in 1988, 1995, 1996, and 1997 and find that only the 1996
legislation was not associated with a significant reduction in admissions.
8
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THE AMERICAN ECONOMIC REVIEW
March 2009
a negative relationship between seizures and prices.10 Miron (2003a) finds that enforcement
increases prices, but that the impact on price is smaller than expected. More recent work suggests, however, that enforcement and treatment are both effective strategies relative to other
efforts such as incarceration (Henry Saffer and Chaloupka 1999). Caulkins and Peter H. Reuter
(1998) likewise find that enforcement increases prices. Caulkins (2000) argues that prohibition
and enforcement are effective, but that there are diminishing returns to enforcement. Another
strand of the literature, however, suggests that a combination of legalization and taxation may
be more effective than supply-side enforcement in reducing substance abuse (Michael Grossman
2004; Gary S. Becker, Kevin M. Murphy, and Grossman 2004).
One of the primary limitations of the empirical literature on the efficacy of enforcement is that
supply shocks are typically local and temporary. This makes measuring their impact difficult
with the survey data used in most studies. In addition, enforcement successes are often correlated
with prevalence, which can result in biased estimates. We address these issues by focusing on a
large abrupt supply shock and using censuses of adverse events rather than survey data. Our data
have the additional advantage that they include the precise timing and location of events.
The literature on drug interventions focuses on supply-side efforts targeting the drug itself.
There is little empirical evidence regarding the effectiveness of efforts to control the supply
of inputs to the production process. Input control strategies, such as the precursor intervention
examined in this paper, have the potential to be more successful than efforts targeting the drug
itself if the production or distribution of inputs is more highly concentrated than the production or distribution of the drug. With most states having implemented precursor legislation and
additional legislation pending, evidence on the efficacy of precursor control strategies could help
guide policy.
II. Methamphetamine Precursor Regulation and Supply
Methamphetamine production in the United States in the 1980s and early 1990s was dominated by operators of small independent laboratories.11 During the mid-1990s, these operators
were partially displaced by Mexican drug trafficking organizations that operated much larger
“super-labs” capable of producing 10 or more pounds of high-purity methamphetamine in a
24-hour period.12 Methamphetamine is a Schedule II drug.13 However, the primary precursors—
ephedrine and pseudoephedrine—have numerous legitimate uses and were considered to have a
low potential for abuse. These substances are key ingredients in such over-the-counter drugs as
Sudafed and Tylenol Cold and were readily available in the early 1990s.
In the 1990s, the DEA became aware that legally imported ephedrine and pseudoephedrine
were being diverted to methamphetamine producers. The DEA expends considerable resources
to restrict the supply of these precursors to clandestine labs. These efforts have been facilitated
by recent federal legislation that increased the restrictions on both ephedrine and pseudoephedrine distribution. There were significant changes in the federal regulations enacted in 1988,
1993, 1996, 1997, 2000, and 2005. In 1988 the Chemical Diversion and Trafficking Act (CDTA)
imposed reporting, record-keeping, and import/export notification requirements for regulated
10
They offer six potential explanations for the counterintuitive result: 1) aggregation of price data disguises shortterm price variation due to seizures, 2) seizures temporarily lower dealer demand, 3) market power, 4) quantity-quality
trade-offs, 5) increased supply is correlated with both lower prices and increases in seizures, and 6) increased quantity
discounts.
11
Outlaw motorcycle gangs have traditionally been heavily involved in small-scale operations.
12
Most of these super-labs were located in California and other Western states during this period.
13
Schedule II drugs have safe and acceptable uses in the United States, but also have a high risk of abuse and so are
tightly regulated.
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Dobkin and Nicosia: Methamphetamine, Public Health, and Crime
329
transactions in bulk (powder) ephedrine and pseudoephedrine.14 However, it did not control tablets or capsules. The Domestic Chemical Diversion Control Act (DCDCA) was passed in 1993
and implemented in 1994 and 1995. The legislation removed the record-keeping and reporting
exemption for single-entity ephedrine products. The DCDCA also required distributors, importers, and exporters of List I chemicals to register with the DEA.15 The DEA could deny or revoke
a company’s registration without proof of criminal intent. In 1996 the Methamphetamine Control
Act (MCA 1996) regulated access to over-the-counter medicines containing ephedrine. The following year, the Methamphetamine Control Act (MCA 1997) regulated products containing
pseudoephedrine or phenylpropanolamine with or without other active ingredients. Significant
elements of the MCA were implemented in early 1998. In 2000, the Methamphetamine AntiProliferation Act (MAPA) established thresholds for pseudoephedrine drug products. Finally, in
2005 the Combat Methamphetamine Epidemic Act (CMEA) included limits on retail over-thecounter sales of products containing ephedrine, pseudoephedrine, and phenylpropanolamine.
This project focuses on two major enforcement efforts made possible by the DCDCA. In May
1995, the DEA executed a search and seizure warrant at Pennsylvania-based tablet manufacturer Clifton Pharmaceuticals (Suo 2004). The seizure netted 25 metric tons of ephedrine and
pseudoephedrine—an amount that would yield 16 tons of methamphetamine under typical clandestine lab production methods.16 In addition, on May 31 of that year, the DEA executed search
warrants at the mail order distributor X-Pressive Looks, Inc. (XLI).17 The DEA seized 500 cases
of pseudoephedrine in May and shut down XLI’s distribution in August. The DEA determined
that XLI distributed 830 million tablets of pseudoephedrine between April 1994 and August
1995. This amount could produce 13 metric tons of methamphetamine.18 The scale of these two
supply disruptions was enormous. By contrast, the DEA seized only 0.76 metric tons of methamphetamine in all of 1994. As a second measure of the scale of these interventions, the ONDCP
estimated that total methamphetamine consumption in the United States in 1994 was 34.1 metric
tons (ONDCP 2000).19 The size of these two firms relative to the overall market is evidence of
substantial concentration in the precursor market.
III. Data
We use a variety of data sources to examine the impact of the disruption in methamphetamine
precursor supply on methamphetamine price, methamphetamine purity, drug use, health, and
crime. Although the intervention was national, we focus only on California because it was the
primary location for the production and consumption of methamphetamine in the mid-1990s
and because of the availability of detailed data. All datasets except the Arrestee Drug Abuse
Monitoring Program, formerly titled the Drug Use Forecasting (ADAM/DUF) are administrative data that represent a near census of events. These datasets make it possible to compute
monthly, county-level measures of events that facilitate the identification of short-lived or local
14
The CDTA amends the Controlled Substances Act (CSA). The CSA provides schedules of controlled substances
including methamphetamine (Schedule II drug). The Chemical Diversion and Trafficking Act (CDTA) and later amendments placed regulatory controls and criminal sanctions on chemicals (including ephedrine and pseudoephedrine as
List I chemicals) to control domestic and international diversion without disrupting access for legitimate concerns.
15
A List I chemical is a chemical that, in addition to having legal uses, is an important component of the manufacturing process for a controlled substance.
16
The maximum conversion rate for ephedrine and pseudoephedrine is 92 percent, but typically labs convert at a
rate of 50 percent to 75 percent. We use the midpoint (62.5 percent) for this estimation.
17
http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=11th&navby=case&no=989094OPN (accessed December
2008).
18
It is unclear if the two firms targeted by these interventions were associated.
19
The size of these interventions suggests that ONDCP may be underestimating consumption.
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THE AMERICAN ECONOMIC REVIEW
March 2009
effects. Data are available from 1994 onward for all outcomes, but due to implementation of
additional precursor legislation in early 1998, we confine our analysis to the period from January
1994 to December 1997.
Estimates of price and purity are constructed from the DEA’s System to Retrieve Information
from Drug Evidence (STRIDE) dataset. STRIDE is a forensic database populated primarily with
DEA seizures and purchases that were sent to the lab for analysis. The dataset records the purity of
seized and purchased methamphetamines, the price of purchased methamphetamines, and the location and date of each purchase and seizure.20 There are two issues of concern. First, the recorded
transactions are likely not representative of all drug transactions (ONDCP 2004c; Joel L. Horowitz
2001). Nevertheless, STRIDE represents the best measures of the purity and prices of illegal drugs
in the United States. Second, there are insufficient observations to construct reliable county-month
level measures. This second limitation restricts our analysis of price and purity to the state level and
prevents us from using prices and purity in the panel regression analyses.
The health outcomes are derived from two datasets. The first dataset is the California Office
of Statewide Health Planning and Development (OSHPD) census of hospitalizations. These discharge data include individual-level information on the cause of admission, other conditions
present on admission, month of admission, hospital location, residential location of patient (e.g.,
zip code), medical costs, and payment source. Amphetamine-related admissions are identified
by diagnosis (ICD-9-CM) codes: 304.4 (amphetamine and other psychostimulant dependence),
305.7 (amphetamine or related acting sympathomimetic abuse), 969.7 (psychostimulant poisoning), and E854.2 (accidental psychostimulant poisoning).21 The second dataset contains individual-level drug treatment admission records from the California Alcohol and Drug Data System
(CADDS). These data identify the primary, secondary, and tertiary drug the person is treated for
(e.g., methamphetamine), month of admission, zip code of residence and county of admission,
frequency of use, type of referral, type of treatment program, and patient demographics. For
these datasets, we use information on the month of admission and county of residence to construct our monthly county-level measures of consumption and adverse health events.22
We use two data sources to examine the relationship between methamphetamine availability
and crime. The ADAM/DUF measures drug use based on both self-reports and the results of
urine analysis for a nonrandom sample of arrestees in 35 US cities. Three of these cities—San
Jose, Los Angeles, and San Diego—are in California. The second source is monthly jurisdictionlevel crime data from the California Department of Justice (CDOJ). These data are a census of
reported crimes, including robberies, burglaries, rapes, homicides, assaults, motor vehicle thefts,
and larcenies. The CDOJ data also include counts of arrests for felony and misdemeanor drug
offenses for marijuana, narcotics, dangerous drugs, and other restricted drugs. The arrests are
also a census of events, but only the most serious drug offense for each arrest is recorded. As
with the health outcomes, we use these data to construct county-month level measures of events:
reported property crime, reported violent crime, and felony and misdemeanor drug arrests.
IV. Estimation Strategy
An intervention that successfully targets methamphetamine precursors should increase the
cost and difficulty of producing high-quality methamphetamine, thereby increasing price and
20
STRIDE also contains prices, purity, and seizures for other drugs, including cocaine and heroin.
Amphetamine use is coded based on a toxicity screen that is administered if drug use is suspected. The hospital
discharge data codes do not distinguish methamphetamine from other amphetamines. But authors’ calculations using
the treatment admission data indicate that methamphetamine was the type of amphetamine the person was actually
using in 95 percent of treatment admissions for amphetamine in California during the mid-1990s.
22
We rely on county of admission when zip code of residence is unavailable in the CADDS data.
21
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Dobkin and Nicosia: Methamphetamine, Public Health, and Crime
331
reducing purity. Consequently, we expect some reduction in the prevalence of methamphetamine
use. Because methamphetamine consumption can directly cause a spectrum of adverse health
effects ranging from dependence to overdose, the intervention should also reduce the incidence
of adverse health outcomes. But the impact on crime may vary depending on the type of crime.
We begin our analysis by documenting the effect of the intervention in the methamphetamine
precursor market on price and purity. Because the STRIDE data are too sparse to generate
county-level measures of price and purity, we document the impact of the intervention on price
and purity by examining the statewide time series.
We then examine the impact of the intervention on methamphetamine consumption.
Unfortunately, there are no surveys large enough to generate monthly, county-level measures.
For this reason, we use hospitalizations with a mention of amphetamine use as a proxy for methamphetamine prevalence. We estimate the following regression to evaluate the first-stage relationship between the intervention and methamphetamine