Methodological Issues and Selected Economic Consequences of Substance Abuse in Ontario

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Abstract
Substance abuse not only adversely affects the health of users, but also imposes economic and other burdens on those around them and the society at large. Estimates of the economic costs of substance abuse are in demand by health planners, policy makers and researchers. This paper estimates selected economic consequences of substance abuse in Ontario in 1992. The cost-of-illness method, in particular, the human capital approach, is used. In addition to employment earnings, employee fringe benefits and the value of housekeeping for both men and women in and outside of the labour force are taken into account when computing productivity losses due to premature death. The costs of hospital care plus productivity losses associated with premature death are estimated to be Cdn $4.42 billion in 1992 for the province of Ontario. It is also found that the harm associated with substance abuse is higher for men than for women.

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