Identifying the impact of the business cycle on drug-related harms in European countries
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Identifying the impact of the business cycle on drug-related harms in European countriesData
2023Cita bibliográfica
Casal, B., Iglesias, E., Rivera, B., Currais, L., & Storti, C. C. (2023). Identifying the impact of the business cycle on drug-related harms in European countries. International Journal of Drug Policy, 122, 104240. https://doi.org/10.1016/j.drugpo.2023.104240
Resumo
[Abstract] Background: The evidence resulting from the analysis of the association between economic fluctuations and their
impact on the substance use is mixed and inconclusive. Effects can be pro-cyclical (drug-related harms are
predicted to rise when economic conditions improve), counter-cyclical (drug-related harms are predicted to rise
in bad economic times) or unrelated to business cycle conditions as different transmission mechanisms could
operate simultaneously.
Methods: The main aim of this study is to assess, from a macroeconomic perspective, the impact of economic
cycles on illegal drug-related harms in European countries over the 2000-2020 period. To this end, the regime dependent relationship between drug-related harm, proxied by unemployment, and the business cycle, proxied
by overdose deaths will be identified. Applying a time dynamic linear analysis, within the framework of threshold
panel data models, structural-breaks will also be tested.
Results: The relationship between economic cycles (proxied by unemployment) and drug-related harms (proxied
by overdose deaths) is negative, and therefore found to be pro-cyclical. One percentage point in the country
unemployment rate is predicted to reduce the overdose death rate by a statistically significant percentage of 2.42.
A counter-cyclical component was identified during the 2008 economic recession. The threshold model captures
two effects: when unemployment rates are lower than the estimated thresholds, ranging from 3.92% to 4.12%,
drug-related harms and unemployment have a pro-cyclical relationship. However, when unemployment rates are
higher than this threshold, this relationship becomes counter-cyclical.
Conclusions: The relationship between economic cycles and drug-related harms is pro-cyclical. However, in sit uations of economic downturns, a counter-cyclical effect is detected, as identified during the 2008 economic
recession.
Palabras chave
Drug-related harms
Macroeconomic conditions
Dynamic threshold panel data models
European countries
Macroeconomic conditions
Dynamic threshold panel data models
European countries
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Atribución-NoComercial-SinDerivadas 4.0 Internacional
ISSN
0955-3959