Monday, 5 January 2015

Meth dealers and baptists

In Yandle's story, you need a mix of bootleggers and Baptists to get really bad policy. The Baptists provide the moral veneer for some atrocious policy, like alcohol prohibition, while the bootleggers quietly provide the cash to make sure things go smoothly.

Nowadays, perhaps it's the meth dealers serving as bootleggers.
Methamphetamine may be more popular in areas of the U.S. where it’s illegal to buy a beer.

A trio of economists at the University of Louisville found that Kentucky’s “dry” counties, where alcohol sales are banned, have more meth lab seizures per capita than do the state’s “wet” counties where liquor is legal.

“Local alcohol bans increase the costs of obtaining alcohol, which reduces the relative price of illicit drugs,” Jose Fernandez, Stephan Gohmann and Joshua Pinkston wrote in a paper presented Sunday at the American Economic Association annual meeting in Boston.

“Additionally, these restrictions flatten the punishment gradient encouraging individuals who are willing to obtain alcohol illegally to also obtain illicit drugs.”
I'll have to get a copy of the paper. The summary looks great fun:
Messrs. Fernandez, Gohmann and Pinkston analyzed data from 2004 to 2010 for Kentucky, where meth-lab seizures are relatively common and a patchwork of local laws govern the sale of alcohol.

They found that dry counties have two more lab seizures per 100,000 residents each year than do wet counties, suggesting that meth production is more common in areas where alcohol sales are banned.

“The results of this research are consistent with the unintended consequences of local alcohol bans predicted by economic theory, the economists concluded in their paper, titled “Breaking Bad: Are Meth Labs Justified in Dry Counties?” (The article opens with quotes about meth production from the television show “Justified,” which is set in Kentucky.)

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