Volume 37, Number 2 (Spring) 2002
Lu, Mingshau, and Thomas G. McGuire. 2002. "The Productivity of Outpatient Treatment for Substance Abuse." Journal of Human Resources 37(2):309-335.
This paper studies the effectiveness of treatment for substance abuse with data on more than 10,000 treatment episodes from Maine. We measure effectiveness as the reduction in the rate of drug use between admission and discharge. In a nonexperimental setting we use instrumental variables to estimate the effect of treatment, measured as number of visits, in an ordered logit model framework. After controlling for selection bias, treatment appears to be effective for moderate and heavy drug users. The marginal productivity of treatment increases then decreases. We estimate a treatment "cutoffpoint" at which marginal productivity becomes zero for both moderate and heavy users.
Mingshan Lu is an assistant professor of economics at the University of
Calgary and a research fellow at the Institute of Health Economics in Alberta.
Thomas G. McGuire is a professor of health economics at Harvard Medical School.
Research support has been provided by Grants 1 R01 DA08715-01 from the National
Institute on Drug Abuse and KO5-MHOO1263 from the National Institute for Mental
Health. Lu also thanks the Alberta Heritage Foundation for Medical Research and
the Institute of Health Economics for financial support. Thanks are due to the
Maine Office of Substance Abuse for cooperation on this study. The authors are
grateful to Margaret Commons, Cam Donaldson, Randall P. Ellis. Susan Ettner,
Richard Frank, William H. Greene, Kevin Liang, Qing J. Liang, Joseph P. Newhouse,
Mike Riordan, Roland Sturm, Alwyn Young, and two anonymous reviewers for their
valuable comments. Application for use of the data can be made to the Maine
Office of Substance Abuse,
Augusta, Maine.
© 2003 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X