Colleges employ a wide variety of policies to regulate alcohol and drug use. A model where a regulator monitors the activity of a heterogeneous population of individuals is presented. Engaging in the activity is desired by each, but the aggregate activity exhibits a negative externality. The regulator is unable to observe the quantity or propensity for the activity of any individual, but can establish a maximum acceptable amount of activity and imperfectly monitor compliance with the standard. In this environment the choices made, the need for regulation, and imperfect monitoring are investigated to show that effective policy depends on the goal of the regulator.
Bryan C. McCannon. "An Economic Theory of College Alcohol and Drug Policies." New York Economic Review. vol. 38, Fall 2007, p. 18-36
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