Highlights
Scope of research essay
In Australia, the estimated social costs of illicit drug consumption reported by the Australian Institute of Health and Welfare (AIHW) are significant (AIHW, 2020). These included crime, lost workplace productivity, road accidents, prevention strategies, harm reduction and treatment programs, premature mortality; child maltreatment and protection etc. It is well-understood in communities that private consumption of illicit drugs imposes negative eternal effects.
Furthermore, targeted media reports such as the ABC series “Ice wars” have heightened public awareness of the dark side of illicit drug consumption. However, media reports have been criticized for misrepresented the context of the problem (Lee, 2017).
In Australia, whilst the use of crystal methamphetamine has been a growing concern, the data are far from conclusive. For example, Morris and Salom (2019) reported that there had been an increasing trend of methamphetamine as the drug of choice. In contrast, data from the 2016 National Drug Strategy Household
Survey suggest that overall rates of methamphetamine in the general population has declined over the previous 5 years. However, there is evidence to suggest that crystal methamphetamine is becoming a more popular form of drug amongst drug users (Cracks in the ice, n.d).
The research on policies to reduce drug consumption recognise that negative drug campaigns are often counterproductive (Almeida, Lourenço and Ciriolo, 2017). Stigmatizing drug takers with negative campaign messages often undermines drug users seeking help (Douglass, Early, Wright et al., 2017) and can increase young people’s interest in drug taking. (Lee and Newton, 2016) You have been approached by a local Community group whose online anti-drug campaign (Figure 1) has piqued the interest of the local Member of Parliament.
The Community group has been asked to present a case to explain the rationale behind the potential effectiveness of the campaign message. They are hopeful that, should they make a compelling case, they will get funding to assist with drug mitigation policies in the area.
They have enlisted a number of experts from the local community (including clinicians, front-line service providers, lawyers, etc.) on a pro-bono basis for help on developing a case. You have agreed to provide the economic analysis component. After initial discussion with the Group, it is agreed that your analysis should include:
1. an overview of:
a. data on drug use in Australia with a particular focus on Queensland and Logan, if data are available
b. the social costs of illicit drug use (in monetary terms, if available)
2. a description of the relevant economic theory that examines negative externality effects
3. a critical economics analysis of the above campaign (Figure 1) and a recommendation of a complementary campaign aimed at reducing drug users.
You are required to support your economic analysis with appropriate data and economic models (partial equilibrium analysis) which you use to examine how the policy achieves the desired outcome. A brief summary of the potential economic effects (costs and benefits) of each of the above policies is required. However, it is appreciated that a full analysis of effects of these policy solutions is beyond the scope of this work.
The context (Task 1 relates to CRA 1)
In economics we generally start by framing the problem. We also refer to this as setting the context. In this part of your essay (Task 1), you need to articulate what the issue is. This is not simply a case of stating “I think it is a problem because ...”. You need to present an informed context which is supported by peer reviewed published research (not the Courier Mail). In setting the context, you should also include details of the social costs associated with the problem (in dollar values). Data should be from reputable sources. The case that you make in this section provides the basis for economic policy solutions you will present in part 3.
Economic theory (Task 2 relates to CRA 2)
You will need to present the correct theoretical economic model and explain it using appropriate economic terminology (Task 2). It is no secret that this is about the theory of externalities. You will need to present a robust diagrammatic exposition of the correct economic theory of externalities, identifying the theoretical market and efficient equilibrium and deadweight loss aligned to the problem you have identified in part 1. of demand and supply still holds.
The critical analysis (Task 3 relates to CRA 3)
In Task 3, potential policy solutions are critically analysed from an economic perspective. Your analysis should be framed with reference to the economic theory presented in Task 2. However, when applying the theory, it should be noted that you are shifting from the current equilibrium to an equilibrium with lower social costs (rather than a market equilibrium to an efficient equilibrium).
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