An Economic Analysis of Drug Use and Crime

This paper aims to demonstrate how economists approach the investigation of the relationship between drug use and criminal activity. The economic model of crime does not treat criminal activity as deviant behavior, but it considers it as a reaction of individuals to prices and incentives. Drug use has a place in this framework because, in addition to a potential pharmaceutical effect, drug use may affect criminal behavior because of the interaction between drug prices, drug consumption and drug profits. The paper presents statistical problems in uncovering causal relationships between crime and its determinants.