Economic Models in the Context of Heroin Substitution Programs

Abstract

Despite widespread disapproval of harm reduction strategies, and heroin substitution programs in particular, evidence from the Vancouver and Swiss trials both indicate that these public health measures are positively correlated with a decrease in the incidence of drug use and high treatment retention rates, as well as a reduction in crime and an increase in employment rates.

This paper examines the predictions of two widely accepted economic theories in the context of these harm reduction programs: the rational choice theory and the behavioural economic theory and explains how neither economic model can account for the empirical findings of the heroin substitution trials on its own. Rather, the observed trends are more thoroughly explained through a consideration of both rational choice theory and behavioural economic theory.

While predictions of the rational choice theory are consistent with empirical findings that peripheral societal costs associated with illicit drug use generally decrease in response to heroin substitution programs, it fails to account for other trends associated with illicit drug use. Behavioural economics thus helps to explain the other empirical data that have emerged from studies of heroin substitution programs. Therefore, a complete economics theory of addiction requires some acknowledgement that both of these theories of economics are valid and operate together. Finally, as heroin substitution takes place among persons already addicted to illicit drugs, one limitation of this analysis is its inability to be directly applied to the issue of legalization.