Prices, Legalisation and Marijuana Consumption

The debate concerning the legalisation of marijuana is intensifying. As the price of marijuana would most likely decrease following legalisation, the law of demand implies that consumption would rise. But by how much? This paper analyses the effect of legalisation on consumption by using data from a specifically-conducted survey of first year students at The University of Western Australia. The results indicate that 53 percent of students have consumed marijuana with males exhibiting a higher intensity than females. The results also show that legalisation would cause consumption to increase by approximately 4 percent. Both legalisation and a 50 percent fall in the price would cause an 11 percent increase in the marijuana consumption. For all consumers, the gross price elasticity, which includes the effects of both legalisation and a price change, is estimated to be -.2. the net price elasticity, which takes out the legalisation effect, is -.1. Accordingly, marijuana consumption is estimated to be price inelastic. While these estimates are low, they are both highly significant, implying that price matters , as does legalisation, even for marijuana smokers

Two Short Papers on Marijuana, Legalisation and Drinking: (1) Exogeneous Shocks and Related Goods: Drinking and the Legalisation of Marijuana; and (2) Notes on Projections of Alcohol Consumption Following Marijuana Legalisation

(1) The paper uses the substitutability between goods to model the transmission to other products of a consumption shock to one product. The framework is used to analyse the impact on drinking of legalisation of marijuana. For all types of consumers for example, the results indicate that legalisation would led to approximately a 4-percent increase in marijuana consumption, while beer, wine and spirits consumption would fall by 1 percent, 2 percent and almost 4 percent, respectively. And; (2) Clements and Daryal (2005) develop a utility-maximising theory of how exogenous shocks to one market have implications for the consumption of related goods, and applied that theory to analyse the impacts on drinking of possible legalisation of marijuana. These notes set out the derivations of the standard errors of their projections.Legalisation, marijuana, alcohol

Marijuana Prices in Australia in the 1990s

Using data supplied by the Australian Bureau of Criminal Intelligence, this paper describes and analyses Australian marijuana prices in the 1990s.Marijuana Prices, Drugs, Illicit Substances