Political Crossfire Forums

[Nathyn]

I'm no economist and I oppose prohibition of drugs. However, I had an idea recently: A means of determining addiction for an economic perspective. There isn't much of an objective means of determining "addiction," yet other than vague observations by neuropsychologists and pharmocologists. However, addiction could be determined by economics, by calculating individual consumption of that drug.

Addiction is largely synonymous with "extreme desirability." Desirability is itself an emotion which modifies our reason. When we see half-naked girls dancing around a bottle of Dr. Pepper on TV, we're more likely to buy Dr. Pepper instead of Mr. Pibb because of the girls. But what distinguishes addition is two-fold: 1) it overwhelms our reason 2) it strongly negatively impacts our life. A "managed addiction," is not really an alcohol. Such as with alcohol, a person is likely addicted, at least to some extent, if they drink regularly. But being mildly physically addicted to alcohol is not necessarily alcoholism. Scientists have found that even basic substances such as fat, sugar, and salt are somewhat physically addictive, but not all of us are obese. Because food, like alcohol, is arguably a manageable addictiion.

So, an addiction's proper definition would be "an emotion of extreme desirability which modifies and can overwhelm our reason and\or negatively impact our life."

Economics already can measure the individual desirability of a drug: the average individual consumption of said drug as a percent of their income. Drugs could therefore be ranked according to the average consumption as a percent of income of those who use them. Whereas a person might spend $40 a month on marijuana, it's rather unlikely to see a person become homeless because of "addiction" to marijuana. From there, it's simply a matter of determining whether a person's consumption of the drug tends to exceed their budget so as they are either forced to consume more than 100% (such as through carelessly borrowing money or theft) or they can no longer live at the average poverty level for their geographic location. Either would result in a negative impact on a person's life. A "addiction threshold," could also be created, as addictive drugs' desirability would vastly decrease from the desirability of other strongly desirable yet non-addictive items. However, it wouldn't necessarily begin to deviate under the above two conditions mentioned above, but slightly earlier, with only a minority ending up consuming more than 100% or living in poverty.

The threshold could begin with the highest desired drug which is known by biologists to be non-addictive or only mildly addictive.

As for those who live in poverty and are on drugs, such would again need to be determined by a threshold, as current poverty estimates are ambiguous, so that a person can be "poor," while still eating fast food, which shouldn't be considered "addictive." The threshold would be determined by observing the difference in the poor's consumption of desirably non-luxury items versus the consumption of potentially addictive substances. Again, a poor person may be poor, but wouldn't shift themselves into homelessness because of drugs.

I'm also sure somebody here could turn what I just said into an economic model. If you know how, have at it.

[gavnook]

Um. Your brain works funny.

This isn't really economics, per se. The primary criteria for determining addiction, I think, would be cost. This is not simply money cost, but what does the addict have to give up? A job, a relationship, etc? That's sort of economic-ish. What is the oppourtunity cost of feeding the habbit? Although, this alone doesn't determine an addiction, it is what matters. Many people are caffine addicts, but it's not normally a problem as there is very little cost.

[Brooklyn]

Wouldn't addiction be considered a market failure in a way. With addiction you can no longer make the assumption that humans will act rationally. Then again, you can simply say that, to an addict, the drug (or whatever they are addicted to) may be very inelastic (demand) or maybe even perfectly inelastic. I dont know if its possible to find out exactly how inelastic the different drugs are because its kind of hard to get price data on illegal substances. Just from observation though, I would say marijuana is more elastic than methamphetamines (the more addictive it is the more inelastic it will be). Pretty interesting topic though....

[Brooklyn]

Upon second thought, even though humans would have addictive behavior because of the product, they would still be acting rationally, in an economic sense, because they are still maximizing utility.

[Nathyn]

gavnook wrote: Um. Your brain works funny.

This isn't really economics, per se. The primary criteria for determining addiction, I think, would be cost. This is not simply money cost, but what does the addict have to give up? A job, a relationship, etc? That's sort of economic-ish. What is the oppourtunity cost of feeding the habbit? Although, this alone doesn't determine an addiction, it is what matters. Many people are caffine addicts, but it's not normally a problem as there is very little cost.
They don't currently measure addiction according to opportunity cost, though, but according to biological determinations, which may be more vague.

Brooklyn wrote: Wouldn't addiction be considered a market failure in a way. With addiction you can no longer make the assumption that humans will act rationally. Then again, you can simply say that, to an addict, the drug (or whatever they are addicted to) may be very inelastic (demand) or maybe even perfectly inelastic. I dont know if its possible to find out exactly how inelastic the different drugs are because its kind of hard to get price data on illegal substances. Just from observation though, I would say marijuana is more elastic than methamphetamines (the more addictive it is the more inelastic it will be). Pretty interesting topic though....
Yes. At the very least, it's an invalid contract, depending upon the level of addiction.

Brooklyn wrote: Upon second thought, even though humans would have addictive behavior because of the product, they would still be acting rationally, in an economic sense, because they are still maximizing utility.
The key word in that sentence is "in an economic sense."

Maximizing utility in the immediate moment is not necessarily rational. Any action can be attributed to self-interest. If maximizing utility is considered rational by economics, then there is no such thing as an "irrational," action.

[evil muppet]

economic addiction sounds like inelasticity.

[Brooklyn]

Quote: They don't currently measure addiction according to opportunity cost, though, but according to biological determinations, which may be more vague.

Like I said in my first reply, I believe the easiest way figure out addiction from an economic point of view would be to use demand elasticity. Collecting that data would be the hard part for the illegal drugs. But with cigarettes, coffee, and alcohol, you should rank them according to how little each one resonds to price changes (elasticity).

Quote: The key word in that sentence is "in an economic sense."

Maximizing utility in the immediate moment is not necessarily rational. Any action can be attributed to self-interest. If maximizing utility is considered rational by economics, then there is no such thing as an "irrational," action.

There are other criteria, but as far as I know, an addict's behavior still fits all of the criteria for rational behavior. I will have to read a little more on this though to understand it fully.

[Nathyn]

Brooklyn wrote: Wouldn't addiction be considered a market failure in a way. With addiction you can no longer make the assumption that humans will act rationally. Then again, you can simply say that, to an addict, the drug (or whatever they are addicted to) may be very inelastic (demand) or maybe even perfectly inelastic. I dont know if its possible to find out exactly how inelastic the different drugs are because its kind of hard to get price data on illegal substances. Just from observation though, I would say marijuana is more elastic than methamphetamines (the more addictive it is the more inelastic it will be). Pretty interesting topic though....
I just realized that "inelasticity of demand," would be the perfect way to describe my original post. Then, I just read your reply right now.

Yes. Inelasticity of demand. With rising price, if the good is not addictive, demand will be perfectly elastic. If the good is "perfectly addictive," demand will be perfectly inelastic.