This article estimates the effect of mental illness on demand for addictive substances, allowing for structural endogeneity and simultaneity between mental illness and addictive consumption. Results show that individuals with a history of mental illness are 26% more likely to consume alcohol,...

The authors develop a method to correct for nonrandom measurement error in a binary indicator of illicit drugs. Their results suggest that estimates of the effect of self-reported prenatal drug use on birth weight are biased upwards by measurement error--a finding contrary to predictions of a...