TY - JOUR AU - Arkes,Jeremy AU - Pacula,Rosalie Liccardo AU - Paddock,Susan M. AU - Caulkins,Jonathan P. AU - Reuter,Peter TI - Why the DEA STRIDE Data are Still Useful for Understanding Drug Markets JF - National Bureau of Economic Research Working Paper Series VL - No. 14224 PY - 2008 Y2 - August 2008 UR - http://www.nber.org/papers/w14224 L1 - http://www.nber.org/papers/w14224.pdf N1 - Author contact info: Jeremy Arkes Graduate School of Business and Public Policy Naval Postgraduate School 555 Dyer St Monterey, CA 93943 Rand Corporation 1776 Main Street, Santa Monica, CA 90401 E-Mail: jaarkes@nps.edu Rosalie Liccardo Pacula RAND Corporation 1776 Main Street P.O. Box 2138 Santa Monica, CA 90407-2138 Tel: 310/393-0411 ext. 6494 Fax: 858/350-8798 E-Mail: pacula@rand.org Susan M. Paddock RAND Corporation 1776 Main Street Santa Monica, CA 90407-2138 E-Mail: paddock@rand.org Jonathan Caulkins Carnegie Mellon University 5000 Forbes Avenue Pittsburgh, PA 15213-3890 E-Mail: caulkins@cmu.edu Peter Reuter University of Maryland E-Mail: preuter@umd.edu AB - In 2001, use of the STRIDE data base for the purposes of analyzing drug prices and the impact of public policies on drug markets came under serious attack by the National Research Council (Manski et al., 2001; Horowitz, 2001). While some of the criticisms raised by the committee were valid, many of the concerns can be easily addressed through more careful use of the data. In this paper, we first disprove Horowitz's main argument that prices are different for observations collected by different agencies within a city. We then revisit other issues raised by the NRC and discuss how certain limitations can be easily overcome through the adoption of random coefficient models of drug prices and by paying serious attention to drug form and distribution levels. Although the sample remains a convenience sample, we demonstrate how construction of city-specific price and purity series that pay careful attention to the data and incorporate existing knowledge of drug markets (e.g. the expected purity hypothesis) are internally consistent and can be externally validated. The findings from this study have important implications regarding the utility of these data and the appropriateness of using them in economic analyses of supply, demand and harms. ER -