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| Mental Illness and Substance Abuse
"When other factors are held constant, mental illness does
increase use of addictive goods -- relative to use by the overall population
-- by 20 percent for alcohol, 27 percent for cocaine, and 86 percent for
cigarettes." Mental illness is defined as an abnormality in cognition,
emotion, mood, or social function, which is severe in level or duration.
Many people experience personal upheavals, but a true diagnosable mental
illness affects about 24 percent of the U.S. population in any given year.
Still, a staggering 43 percent of the population has had a diagnosable
mental illness at some point in their lives. There is a definite connection
between mental illness and the use of addictive substances. Individuals with
an existing mental illness consume roughly 38 percent of all alcohol, 44
percent of all cocaine, and 40 percent of all cigarettes. Furthermore, the
people who have ever experienced mental illness consume about 69
percent of all the alcohol, 84 percent of all the cocaine, and 68 percent of
all cigarettes. Previously economists showed that price increases reduce the
use of alcohol, illegal drugs, and tobacco. NBER Research Associate Henry
Saffer and co-author Dhaval Dave theorize that if mental illness
does alter the demand for addictive goods, then those individuals'
consumption may be either more or less responsive to higher prices. In
Mental Illness and the Demand for Alcohol, Cocaine, and Cigarettes (NBER
Working Paper No. 8699), they propose that if people with mental
illness are strongly affected by increased prices, then tax increases are a
justifiable method for reducing consumption within this high-consuming
group. The researchers analyze data from a 1991 survey of 8,098 respondents
conducted by the National Comorbidity Survey (NCS), a congressionally
mandated study of mental illness in the United States. The survey defines 12
disorder groups; individuals were classified as mentally ill if they met the
criteria for any one of the disorders. The survey also contained a series of
detailed questions regarding alcohol, cocaine, and tobacco consumption.
Information about the subject's family history and stressful life events,
such as legal problems, loss of a close relationship, and poor physical
health, also were obtained. The data allow Saffer and Dave to address the
effect of mental illness on the level of both consumption and price
sensitivity. The researchers discover that, when other factors are held
constant, mental illness does increase use of addictive goods --
relative to use by the overall population -- by 20 percent for alcohol, 27
percent for cocaine, and 86 percent for cigarettes. A history of mental
illness increases participation (relative to participation in the overall
population) by 25 percent for alcohol, 69 percent for cocaine, and 94
percent for cigarettes. Family history increases consumption of alcohol and
cocaine for the mentally ill, but the influence is actually weaker than for
those without mental illness. The authors find that individuals with mental
illness are sensitive to price changes, but that their sensitivity to price
changes is roughly similar to those who are not mentally ill. The increased
prices of the addictive good will dampen its use by the mentally ill, so
alcohol and tobacco taxes may be a valuable policy tool. -- Marie Bussing-Birks |
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