Estimating the costs of substance abuse: Implications to the estimation of the costs and benefits of gambling


This presentation describes a recently developed set of guidelines for estimating the economic costs of substance abuse, summarizes the findings from a Canadian study that utilized these guidelines, and discusses the implications to the potential development of guidelines for estimating the costs and benefits of gambling. The guidelines for estimating the costs of substance abuse present a general framework of costs to be included and discuss methodological issues such as the definition of abuse; determination of causality; comparison of the demographic and human capital approaches; the treatment of private costs; the treatment of nonworkforce mortality and morbidity; the treatment of research, education, law enforcement costs, the estimation of avoidable costs and budgetary impact of substance abuse, and the significance of intangible costs. Utilizing these guidelines, a study was undertaken to estimate the economic costs of alcohol, tobacco, and illicit drugs to Canadian society in 1992. Based on this experience, it is argued that cost/benefit research should be conducted by multidisciplinary teams, that the real value of such work lies more in the detailed findings than in the bottom line results, and that focus should be placed on developing an ongoing process for developing consensus on how to conduct studies of the costs and benefits of gambling, rather than attempting to find a precise methodology that everyone agrees upon.

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