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Demand for Marijuana, Alcohol and Tobacco: Participation, Levels of Consumption and Cross-equation Correlations

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Author Info
XUEYAN ZHAO
MARK N. HARRIS

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Abstract

We investigated marijuana, alcohol and tobacco consumption using micro-unit data from the Australian National Drug Strategy Household Surveys. We estimated a multivariate probit (MVP) model to allow for correlations across participations of different drugs and a sequential model to study separately the determinants of participation and the levels of consumption. The MVP results indicate significant and positive correlations across all three drugs through unobservable characteristics, with the correlation coefficient between marijuana and tobacco being the highest. The MVP approach allows for better prediction of conditional and joint probabilities, providing valuable information for policy makers in a multidrug framework. Copyright © 2004 Economic Society of Australia..

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Publisher Info
Article provided by The Economic Society of Australia in its journal The Economic Record.

Volume (Year): 80 (2004)
Issue (Month): 251 (December)
Pages: 394-410
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Handle: RePEc:bla:ecorec:v:80:y:2004:i:251:p:394-410

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  1. van Ours, Jan C & Williams, Jenny, 2005. "Cannabis Prices and Dynamics of Cannabis Use," CEPR Discussion Papers 4991, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Kenneth W. Clements, 2004. "Three Facts About Marijuana Prices," Economics Discussion / Working Papers 04-06, The University of Western Australia, Department of Economics. [Downloadable!]
  3. Kenneth W. Clements & Yihui Lan & Xueyan Zhao, 2005. "The Demand for Vice: Inter-Commodity Interactions with Uncertainty," Economics Discussion / Working Papers 05-30, The University of Western Australia, Department of Economics. [Downloadable!]
    Other versions:
  4. Sara Markowitz & John Tauras, 2006. "Even For Teenagers, Money Does Not Grow on Trees: Teenage Substance Use and Budget Constraints," NBER Working Papers 12300, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Anthony Harris, 2008. "Chronic Disease and Labour Force Participation in Australia: an endogenous multivariate probit analysis of clinical prevalence data," Centre for Health Economics Research Papers 25/08, Monash University, Centre for Health Economics. [Downloadable!]
  6. Kenneth W. Clements & Xueyan Zhao, 2005. "Economic Aspects of Marijuana," Economics Discussion / Working Papers 05-28, The University of Western Australia, Department of Economics. [Downloadable!]
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