The effects of cocaine and heroin price on drug-related emergency department visits

This paper estimates the empirical relationship between cocaine and heroin prices and drug-related hospital ED admissions for 21 U.S. cities. These outcomes bypass some of the problems with self-reports and directly measure a component of healthcare costs associated with heavy drug usage. The price elasticity of the probability of a cocaine and heroin episode is estimated at -0.27 and -0. 10, respectively. A 10% increase in prices can prevent 10,723 cocaine and heroin-related ED visits, with cost savings between $21 million and $47 million. These low magnitudes of the drug outcome-price response have implications for the cost-effectiveness of enforcernent-driven price increases. (c) 2005 Elsevier B.V. All rights reserved.