Journal article
The Welfare Implications of Addictive Substances: A Longitudinal Study of Life Satisfaction of Drug Users
J Moschion, N Powdthavee
Journal of Economic Behavior and Organization | Elsevier | Published : 2018
Abstract
This paper provides an empirical test of the rational addiction model, used in economics to model individuals’ consumption of addictive substances, versus the utility misprediction model, used in psychology to explain the discrepancy between people’s decision and their subsequent experiences. By exploiting a unique data set of disadvantaged Australians, we provide longitudinal evidence that a drop in life satisfaction tends to precede the use of illegal/street drugs. We also find that the abuse of alcohol, the daily use of cannabis and the weekly use of illegal/street drugs in the past 6 months relate to lower current levels of life satisfaction. This provides empirical support for the utili..
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Awarded by National Institute on Aging
Funding Acknowledgements
This paper uses unit record data from Journeys Home: Longitudinal Study of Factors Affecting Housing Stability (Journeys Home). The study was initiated and is funded by the Australian Government Department of Social Services (DSS). The Department of Employment has provided information for use in Journeys Home and it is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to DSS, the Department of Employment or the Melbourne Institute. The second author would also like to thank the US National Institute on Aging (Grant R 01AG040640) and the Economic & Social Research Council for their generous financial support.