How Cost-of-Illness Studies Can be Made More Useful for Illicit Drug Policy Analysis

Cost-of-illness (COI) studies seemingly provide a solid foundation for quantifying the potential benefits of illicit drug policy interventions that reduce drug use at the population level. However, their usefulness is severely limited. In this paper, we suggest several improvements to substance abuse COI studies. The first set of improvements can be implemented with little change to the current framework: developing estimates that reflect the best available information, rather than using lower bound estimates that represent `conservative' figures; dealing with uncertainty explicitly by developing estimation ranges; and disaggregating social costs by particular illicit drug types. The second set of improvements address key conceptual problems in transferring a health approach to a `condition' where healthcare costs are a minor component: dealing with the intangible costs of drug dependence; valuing property crime; including systemic crime; and considering the spillover effects of drug abuse on human capital formation. COI studies can become valuable sources of policy-relevant information if their authors improve the current approach by making changes such as those identified here.