In Australia, the estimated social costs of illicit drug consumption reported by the Australian Institute of Health and Welfare (AIHW) are significant (AIHW, 2020). These included crime, lost workplace productivity, road accidents, prevention strategies, harm reduction and treatment programs, premature mortality, child maltreatment and protection etc. It is well-understood in communities that private consumption of illicit drugs imposes negative eternal effects.
Furthermore, targeted media reports such as the ABC series “Ice wars” have heightened public awareness of the dark side of illicit drug consumption. However, media reports have been criticized for misrepresenting the context of the problem (Lee, 2017).
In Australia, whilst the use of crystal methamphetamine has been a growing concern, the data are far from conclusive. For example, Morris, Barber et al (2020) reported that there had been an increasing trend of methamphetamine as the drug of choice. In contrast, data from the 2016 National Drug Strategy Household Survey suggest that overall rates of methamphetamine in the general population has declined over the previous 5 years.
However, there is evidence to suggest that crystal methamphetamine is becoming a more popular form of drug amongst drug users (Cracks in the ice, n.d).
The research on policies to reduce drug consumption recognise that negative drug campaigns are often counterproductive (Almeida, Lourenço and Ciriolo, 2017). Stigmatizing drug takers with negative campaign messages often undermines drug users seeking help (Douglass, Early, Wright et al., 2017) and can increase young people’s interest in drug taking. (Lee and Newton, 2016).
You have been approached by a local Community group whose online anti-drug campaign has piqued the interest of the local Member of Parliament.
The Community group has been asked to present a case to explain the rationale behind the potential effectiveness of the campaign message. They are hopeful that, should they make a compelling case, they will get funding to assist with drug mitigation policies in the area.
They have enlisted a number of experts from the local community (including clinicians, front-line service providers, lawyers, etc.) on a pro-bono basis for help on developing a case. You have agreed to provide the economic analysis component. After initial discussion with the group, it is agreed that your analysis should be presented as follows.
Part A: Setting the scene. Here you need to provide an overview of; data on drug use in Australia with a particular focus on Queensland and Logan, if data are availablethe social costs of illicit drug use (in monetary terms, if available)
Part B: a description of the relevant economic theory that examines negative externality effects. This analysis should be framed around a model (diagram) of the economic theory of externalities, and as a minimum, should clearly identify the theoretical market equilibrium and efficient equilibrium and any deadweight loss.
Part C: a critical economics analysis of the above campaign (Figure 1) and a recommendation of a complementary campaign aimed at reducing drug users.