Drug Abuse and the Internet: Evidence from Craigslist

The United States is in the midst of a drug overdose epidemic. Although the online availability of drugs has been a growing concern with considerable speculation that digital platforms are contributing to this epidemic, empirical assessments have been lacking. To quantify this impact, we rely on the phased rollout of Craigslist, a major online platform, as an experimental setup. Applying a difference-in-differences approach on a national panel data set for all counties in the United States from 1997 to 2008, we find a 14.9% increase in drug abuse treatment admissions, a 5.7% increase in drug abuse violations, and a 6.0% increase in drug overdose deaths after Craigslist’s entry. The impacts of Craigslist’s entry are larger among women, whites, Asians, and the more educated. Further, the unintended consequences of Craigslist are more likely to accrue in larger, wealthier areas with initially low levels of drug abuse. These findings raise the possibility that the marked growth in U.S. drug abuse may have partially stemmed from the wider availability of illicit drugs online at the very beginning of its evolution. This paper was accepted by David Simchi-Levi, information systems.