Perspective in Drug Abuse Treatment Economic Evaluations
- Presenter:
Chair: Willard Manning; Discussant: TBA Tue June 6, 2006 8:00-9:30 Room 225
Rationale: Economic evaluation of drug abuse treatment must consider the perspective of the study and the standing of those potentially affected by the intervention. Economic evaluations are often presented form the taxpayer’s point of view without sufficient analysis of the implications of this adoption.
Objectives: This paper defines the issues related to perspective and standing in economic evaluations. In particular, the problems related to evaluating drug abuse policies and interventions are discussed. Adjustments are recommended to the cost-benefit estimates in the usual cost saving approach. In addition, the willingness-to-pay approach is recommended to adjust questionnaires and target populations.
Methodology: The recommendations are developed in light of public finance issues surrounding the raising of revenue through taxation to fund government expenditures for drug abuse treatment. Both the cost saving approach and the willingness-to-pay approach of cost-benefit analysis are utilized for valuation.
Results: The recommended adjustments for the typical cost-benefit analysis involve adjusting benefits with the marginal cost of financing the government program. The financing mix in a federal system alters the marginal cost of financing and thus requires a further analysis of the specific state and local tax structure in line with the Federal tax structure. The actual standing of the drug abuse treatment client is a standing issue for which no definitive recommendations can be made. With regards to theft losses, treating these as transfers is not recommended because of the lack of standing that the criminal would have. However, many policy options certainly require standing be given to drug users and those in treatment. The willingness-to-pay approach must be designed with sensitivity to the issues of perspective and standing.
Conclusions: Some fairly straightforward adjustments can be made to standard cost-benefit analysis. Issues of standing require the analyst to establish the correct target population for the study, weighting of that population, and sensitivity to the various population groups affected by a particular intervention or policy.
