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Keiko I. Powers

This chapter uses multivariate time-series methods to study one of the most serious public policy problems, the fight against narcotics abuse. The effects of methadone treatment and legal supervision of narcotics use and criminal activities were assessed by applying cointegration and error correction methods that disentangle the long-term (permanent) and the short-term (temporary) effects of intervention. Overall, the system dynamics among these variables were characterized by long-term rather than short-term relationships. Methadone maintenance treatment demonstrated long-term benefits by reducing narcotics use and criminal activities. Legal supervision, on the other hand, did not reduce either narcotics use or property crime in the long run. The chapter explores the policy implications of these findings.