Economists Henry Saffer of Kean University, Frank J....

Economists Henry Saffer of Kean University, Frank J. Chaloupka of the University of Illinois at Chicago, and Dhaval Dave of Bentley College estimated that the government must spend $$\$ 4,170$$ on drug control to deter one person from using drugs and the cost that one drug user imposes on society is $$\$ 897$$. Based on this information alone, should the government spend the money on drug control? $\mathrm{LO} 2$

Labs

Want to see this concept in action?

NEW

Explore this concept interactively to see how it behaves as you change inputs.

View Labs

Key Concepts

Cost-Benefit Analysis

This concept involves comparing the costs of an intervention against its expected benefits. In the context of government spending on drug control, it requires assessing whether the cost to deter one drug user justifies the expenditure when compared to the harm that drug use imposes on society.

Externalities

Externalities refer to the unintended and uncompensated side effects of one party’s actions on third parties. In public policy, negative externalities such as the societal costs imposed by drug use can motivate government intervention if these costs exceed the private costs experienced by the user.

Opportunity Cost

Opportunity cost is the value of the best alternative forgone when a decision is made. In evaluating whether to fund drug control measures, it is crucial to consider what other social or economic programs could be supported by the same level of expenditure, particularly when the cost to deter may far exceed the cost imposed by drug use.

Transcript

Please give Ace some feedback