Economic and other views of addiction: implications for the choice of alcohol, tobacco and drug policies

It is the aim of this paper to provide an overview of developments in implicit and explicit economic views of addiction, to contrast these perceptions with the views of other disciplines and discuss the implications for policy. Addictive behaviours have received considerable attention from disciplines other than economics. The nature of addiction and the contribution of psychological, physiological and social factors have been strongly debated within the addictions field for many years. The views of economists are becoming increasingly important because economic studies of consumption, and tax revenue in the case of licit drugs, are one factor when framing policy. It is therefore crucial to know how economists have treated addiction. Have they neglected it and what are the implications if they have? This paper attempts to answer this question by reviewing and discussing the literature in depth and drawing out the implications for policy.