Country Roads, Take Me to Heroin? Macroeconomic Conditions, Drug Abuse, and Drug Substitution in West Virginia

Tuesday, June 14, 2016
Lobby (Annenberg Center)

Author(s): Daniel Grossman; Brad R Humphreys; Umair Khalil; Jane E Ruseski

Discussant: Isaac Swensen

President Obama recently traveled to West Virginia to address the state's rising epidemic of heroin use. West Virginia has experienced rising rates of heroin arrests despite declining national trends. At the same time, the coal industry contracted substantially. West Virginia currently has the highest unemployment rate in the US (BLS 2015). Additionally, rates of drug use in West Virginia have fluctuated greatly over the past 15 years. The state experienced increased usage across methamphetamines, prescription opioids, and heroin over the past decade. Age adjusted rates (per 100,000) of drug induced death in West Virginia are the highest in the country at 32.9 in 2013 (National Vital Statistics System [NVSS] 2014), more than twice the national average of 14.7, and has increased nearly 33% since 2007 (NVSS 2010, 2014). West Virginia also had the highest rate of overdose deaths associated with opioid drugs in the country (Kercheval 2015). There is anecdotal evidence of a substitution away from prescription drugs towards heroin due to increased enforcement on "pill-mills".

We combine data from several sources, including: Uniform Crime Reports arrest data for drug related offences by age and gender; percent of men employed in the coal industry; unemployment rates by demographic groups; the number of legal prescriptions written; indicators of the presence of prescription drug monitoring programs; and drug pricing data to explore the effect of macroeconomic conditions on heroin use, other drug use, and prescription drug abuse. We exploit intra-county variation in macroeconomic conditions including the impact of coal mine closures to explore how much these county differences explain the recent heroin epidemic. Additionally, we explore gender differences in drug use, overdose, and overdose deaths, to investigate whether coal mine closures can explain these recent trends. Since the coal industry largely employs men (7.4% of employees in the coal mining industry were female (CPS 2014)), we use women as a potential falsification test because we expect the heroin epidemic to be largely concentrated among men. We recognize this is an imperfect measure if differences among women are driven by partner job loss.

We explore booms and busts in the West Virginia coal industry, going back to 1987, and the recent boom in shale gas extraction that occurred in different parts of the state to generate plausibly exogenous variation in local economic conditions to explain variation in the crime data drug use estimates in the BRFSS and YRBSS. We also use economic conditions and drug use in surrounding states (Kentucky, Ohio, Pennsylvania, Virginia, and Maryland) to control for national and regional trends in drug use. We explore both supply and demand issues in the illegal drug and prescription drug markets. Because of the high rates of both drug use and overdose, West Virginia is a unique and particularly interesting environment to study the recent heroin epidemic. This is a particularly timely study in that both state and national policymakers are seeking answers to the question of how to curb drug use and dependence in rural areas.