Marijuana and Crime: Is there a Connection Beyond Prohibition?

We examine the relationship between marijuana use and non-drug related crime using data on arrests from the Arrestee Drug Abuse Monitoring (ADAM) Program and Uniform Crime Reports. There is a positive association between self-reported use at the time of the offence and non-drug related violent, property and income-producing crime even after accounting for other substance use in the ADAM data. Reduced form equations using both data sets only provide evidence supporting a causal mechanism for property and income-producing crime. In the case of violent crime, we find a statistically significant association with arrests but not reported crime, suggesting that marijuana use may just influence the likelihood of getting caught committing these crimes.

An Examination of Gender and Race Differences in Youth Smoking Responsiveness to Price and Tobacco Control Policies

Nationally representative studies consistently report significant gender and racial differences in youth smoking rates, although little research has been done to explain why. In this paper we examine one possible source for this variation: differences in youth responsiveness to changes in price or tobacco control policies. Using data from the 1992-1994 Monitoring the Future surveys, we find that young men are much more responsive to changes in the price of cigarettes than young women. The participation elasticity for men is almost twice as large as that for women. Further, we find that smoking rates of young black men are significantly more responsive to changes in price than young white men. In addition, we find significant differences in responsiveness to particular tobacco control policies. Smoking rates among white youths are responsive to anti-tobacco activities and clean indoor air restrictions, while smoking rates among black youths are significantly influenced by smoker protection laws and restrictions on youth access.

Adolescent Alcohol and Marijuana Consumption: Is There Really a Gateway Effect?

This research analyzes the contemporaneous and intertemporal relationship between the demands for alcohol and marijuana by youths and young adults. A general theory of multi-commodity habit formation is developed and tested using data from the 1983-1984 waves of the National Longitudinal Survey of Youth. An Adjusted Tobit specification is employed for estimating the empirical model. Habit persistence is distinguished from unobserved heterogeneity through a reduced form instrumental variable technique. The results show that higher beer prices significantly reduce the demand for both alcohol and marijuana, indicating a contemporaneous complementarity between these two substances even after controlling for commodity-specific habit formation. Further, prior use of alcohol and cigarettes significantly increases the likelihood of currently using marijuana, providing evidence in support of the gateway hypothesis.

Marijuana Decriminalization: What does it mean in the United States?

It is well known in the drug policy field that eleven states reduced the criminal sanctions associated with possession of small amounts of marijuana. In this paper we review the eleven original decriminalization statutes, documenting key dimensions of these laws and identifying their common denominator. We then examine state laws in effect as of December 31, 1999, along the same key dimensions and show that it is impossible to uniquely identify the so-called decriminalized states. We show the extent to which non-decriminalized states have also reduced penalties associated with possession of small amounts of marijuana as early as 1989, calling into question the interpretation of studies evaluating this policy during the past decade. We conclude by showing that the inclusion of legal dimensions of the policy does not diminish the association identified between decriminalization and recent use, raising questions about how researchers should interpret such findings.

Does Marijuana Use Impair Human Capital Formation?

In this paper we examine the relationship between marijuana use and human capital formation by examining performance on standardized tests among a nationally representative sample of youths from the National Education Longitudinal Survey. We find that much of the negative association between cross-sectional measures of marijuana use and cognitive ability appears to be attenuated by individual differences in school attachment and general deviance. However, difference-in-difference estimates examining changes in test scores across 10th and 12th grade reveal that marijuana use remains statistically associated with a 15% reduction in performance on standardized math tests.

Risks and Prices: The Role of User Sanctions in Marijuana Markets

User sanctions influence the legal risk for participants in illegal drug markets. A change in user sanctions may change retail drug prices, depending on how it changes the legal risk to users, how it changes the legal risk to dealers, and the slope of the supply curve. Using a novel dataset with rich transaction-level information, this paper evaluates the impact of recent changes in user sanctions for marijuana on marijuana prices. The results suggest that lower legal risks for users are associated with higher marijuana prices in the short-run, which ceteris paribus, implies higher profits for drug dealers. Additionally, the findings have important implications for thinking about the slope of the supply curve and interpreting previous research on the effect of drug laws on demand for marijuana.

A Search-Theoretic Model of the Retail Market for Illicit Drugs

A search-theoretic model of the retail market for illegal drugs is developed. Trade occurs in bilateral, potentially long-lived matches between sellers and buyers. Buyers incur search costs when experimenting with a new seller. Moral hazard is present because buyers learn purity only after a trade is made. The model produces testable implications regarding the distribution of purity offered in equilibrium, and the duration of the relationships between buyers and sellers. These predictions are consistent with available data. The effectiveness of different enforcement strategies is evaluated, including some novel ones which leverage the moral hazard present in the market.

Does Spending on Medical Services Change as HMOs Grow and Mature?

This research examines the cost structure of a nationally representative sample of HMOs from 1991-1994 to determine whether cost savings achieved through enrollment growth and age of the plan are shared with any of the factors of production. The data are obtained from Health Care Investment Analysts. A generalized translog cost function is used to derive factor share equations for four intermediate groups of inputs used by an HMO: physician services, other medical provider services, hospital services and administrative services. We estimate the system of annual factor shares using seemingly unrelated regression analysis and find that both plan size and age have a significantly positive effect on the level of plan expenditure on physicians, other medical providers and hospitals. Examination of the changes in factor shares over time, however, indicates that large changes in membership have no significant effect on the amount of resources dedicated to physicians. Only hospitals see a significant increase in the change in factor share at the expense of administrative services.

Marijuana Use and High School Dropout: The Influence of Unobservables

In this study we reconsider the relationship between heavy and persistent marijuana use and high school dropout status using a unique prospective panel study of over 4500 7th grade students from South Dakota who are followed up through high school. Propensity score weighting is used to adjust for baseline differences that are found to exist before marijuana initiation occurs (7th grade). Weighted logistic regression incorporating these propensity score weights is then used to examine the extent to which time-varying factors, including substance use, also influence the likelihood of dropping out of school. We find a positive association between marijuana use and dropping out (OR=5.68), over half of which can be explained by prior differences in observational characteristics and behaviors. The remaining association (OR=2.31) is made statistically insignificant when measures of cigarette smoking are included in the analysis. Because no physiological justification can be provided for why cigarette smoking would reduce the cognitive effects of marijuana on schooling, we interpret this as evidence that the association is due to other factors. We then use the rich data to explore which constructs are driving this result, determining that it is time-varying parental and peer influences.