National Drug Strategy
National Drug Strategy

The costs of tobacco, alcohol and illicit drug abuse to Australian Society in 2004/05 - Summary Report

2. Interpreting the results

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The definition of the economic costs of drug abuse used in the three previous Collins and Lapsley studies, and for the present study, is:


This cost concept, which applies to what has been labelled the demographic approach, is based on the calculation of the size and structure of a hypothetical population in which no drug abuse had occurred. This hypothetical population is then compared with the actual population size and structure, as a basis for estimating drug abuse costs.

Thus, for the purposes of this study, the counterfactual (that is the hypothetical) situation that is compared to the actual 2004/05 drug abuse situation is one in which there has been no abuse of the drug in question for an extended period of time. The study in effect estimates the social costs that were borne in the financial year 2004/05 and that resulted from all drug abuse in 2004/05 and in previous years.

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