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Price and Enforcement Effects on Cocaine and Marijuana Demand

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Author Info
Jeff DeSimone () (National Bureau of Economic Research, and Assistant Professor, Department of Economics, East Carolina University, Greenville, NC 27858.)
Matthew C. Farrelly () (Tobacco Use Research Program, Center for Interdisciplinary Substance Abuse Research, Research Triangle Institute, Research Triangle Park, NC 27709.)

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Abstract

This article estimates equations for past year cocaine and marijuana use among adult and juvenile respondents of the 1990--97 National Household Surveys on Drug Abuse. Unlike most previous studies, we control for the monetary price of marijuana, probabilities of arrest for marijuana and cocaine possession, and state fixed effects. Results indicate that cocaine prices are inversely related to adult cocaine and marijuana demand but are unrelated to juvenile drug demand, marijuana price effects are always statistically insignificant, estimated price effects are inflated when state effects are omitted, and increases in each arrest probability diminish both types of drug use. Copyright 2003, Oxford University Press.

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Publisher Info
Article provided by Oxford University Press in its journal Economic Inquiry.

Volume (Year): 41 (2003)
Issue (Month): 1 (January)
Pages: 98-115
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Handle: RePEc:oup:ecinqu:v:41:y:2003:i:1:p:98-115

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Bruce L. Benson & David W. Rasmussen, 1991. "Relationship Between Illicit Drug Enforcement Policy And Property Crimes," Contemporary Economic Policy, Western Economic Association International, vol. 9(4), pages 106-115, October. [Downloadable!] (restricted)
  2. Saffer, Henry & Chaloupka, Frank, 1999. "The Demand for Illicit Drugs," Economic Inquiry, Oxford University Press, vol. 37(3), pages 401-11, July.
    Other versions:
  3. Farrelly, Matthew C. & Bray, Jeremy W. & Zarkin, Gary A. & Wendling, Brett W., 2001. "The joint demand for cigarettes and marijuana: evidence from the National Household Surveys on Drug Abuse," Journal of Health Economics, Elsevier, vol. 20(1), pages 51-68, January. [Downloadable!] (restricted)
  4. Nisbet, Charles T & Vakil, Firouz, 1972. "Some Estimates of Price and Expenditure Elasticities of Demand for Marijuana Among U.C.L.A. Students," The Review of Economics and Statistics, MIT Press, vol. 54(4), pages 473-75, November. [Downloadable!] (restricted)
  5. Grossman, Michael & Chaloupka, Frank J., 1998. "The demand for cocaine by young adults: a rational addiction approach," Journal of Health Economics, Elsevier, vol. 17(4), pages 427-474, August. [Downloadable!] (restricted)
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  6. Henry Saffer & Frank Chaloupka, 1998. "Demographic Differentials in the Demand for Alcohol and Illicit Drugs," NBER Working Papers 6432, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Frank J. Chaloupka & Michael Grossman & John A. Tauras, 1998. "The Demand for Cocaine and Marijuana by Youth," NBER Working Papers 6411, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
    • Frank J. Chaloupka & Michael Grossman & John A. Tauras, 1999. "The Demand for Cocaine and Marijuana by Youth," NBER Chapters, in: The Economic Analysis of Substance Use and Abuse: An Integration of Econometrics and Behavioral Economic Research, pages 133-156 National Bureau of Economic Research, Inc. [Downloadable!]
  8. Jeffrey DeSimone, 1999. "The Effect of Cocaine Prices on Crime," Working Papers 9907, East Carolina University, Department of Economics. [Downloadable!]
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  9. Chaloupka, Frank J. & Wechsler, Henry, 1997. "Price, tobacco control policies and smoking among young adults," Journal of Health Economics, Elsevier, vol. 16(3), pages 359-373, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dhaval Dave, 2004. "The Effects of Cocaine and Heroin Prices on Drug-Related Emergency Department Visits," NBER Working Papers 10619, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Jeff DeSimone, 2002. "Determinants of Drug Injection Behavior: Economic Factors, HIV Injection Risk and Needle Exchange Programs," NBER Working Papers 9350, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Ours, Jan C. van & Williams, Jenny, 2005. "Cannabis proces and dynamics of cannabis use," Discussion Paper 52, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  4. Jeremy Arkes & Rosalie Liccardo Pacula & Susan M. Paddock & Jonathan P. Caulkins & Peter Reuter, 2008. "Why the DEA STRIDE Data are Still Useful for Understanding Drug Markets," NBER Working Papers 14224, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. 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!]
  6. Harald Tauchmann, 2008. "West-East Convergence in the Prevalence of Illicit Drugs: Socioeconomics or Culture?," Ruhr Economic Papers 0061, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
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  7. Anne Bretteville-Jensen, 2006. "Drug Demand – Initiation, Continuation and Quitting," De Economist, Springer, vol. 154(4), pages 491-516, December. [Downloadable!] (restricted)
  8. Daniel Mejía & Carlos E. Posada, 2007. "Cocaine Production and Trafficking: What do we know?," BORRADORES DE ECONOMIA 003955, BANCO DE LA REPÚBLICA. [Downloadable!]
    Other versions:
  9. Dhaval Dave, 2004. "Illicit Drug Use Among Arrestees and Drug Prices," NBER Working Papers 10648, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Rosalie Liccardo Pacula & Beau Kilmer & Michael Grossman & Frank J. Chaloupka, 2007. "Risks and Prices: The Role of User Sanctions in Marijuana Markets," NBER Working Papers 13415, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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