Optimal Dynamic Allocation of Treatment and Enforcement in Illicit Drug Control
Operations Research
Stochastic skiba sets: an example from models of illicit drug consumption
LSSC'09 Proceedings of the 7th international conference on Large-Scale Scientific Computing
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There is empirical evidence that drug prices have significant impact on demand. For instance, emergency department mentions of various drugs vary in proportion to price raised to a (negative) exponent, which in economists' terms is a constant price elasticity model. This relationship holds even for abrupt spikes in price induced by sudden shortages such as the recent Australian heroin drought. It seems natural to ask how, if at all, drug policy should be varied to take advantage of the opportunity offered by such supply disruptions. We address this question by analyzing a two-stage optimal control model parameterized with data on the current U.S. cocaine epidemic. The number of users and drug control spending are the state and control variables, respectively. The aim is to minimize the discounted stream of the social costs arising from drug consumption plus the control costs. We focus on scenarios with multiple steady states and DNSS-thresholds separating different basins of attraction.