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The effects of price and policy on marijuana use: what can be learned from the Australian experience?

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Author Info

  • J. Williams

    (Department of Economics, University of Melbourne, Parkville, Australia)

Abstract

This research examines the responsiveness of the demand for marijuana to changes in its money price and criminal status using data on individuals from the Australian National Drug Strategy's Household Surveys (NDSHS). The results suggest that both the prevalence of marijuana use and the conditional demand for marijuana in the general population are responsive to changes in its money price. Significant differences are found in the effect of price on participation in marijuana use across age-groups, with participation by youth more price sensitive than participation by older age-groups. Similarly, the effect of the legal status of marijuana use on the participation decision is found to differ across age-groups and gender. Specifically, decriminalisation is associated with an increases in the prevalence of use by males over the age of 25. There is no evidence that decriminalisation significantly increases participation in marijuana use by either young males or females, or that decriminalisation increases the frequency of use among marijuana users. Copyright © 2003 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.796
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 13 (2004)
Issue (Month): 2 ()
Pages: 123-137

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Handle: RePEc:wly:hlthec:v:13:y:2004:i:2:p:123-137

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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References

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  1. 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.
  2. 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.
  3. 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.
  4. DiNardo, John & Lemieux, Thomas, 2001. "Alcohol, marijuana, and American youth: the unintended consequences of government regulation," Journal of Health Economics, Elsevier, vol. 20(6), pages 991-1010, November.
  5. 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.
  6. Frank J. Chaloupka & Rosalie Liccardo Pacula & Matthew C. Farrelly & Lloyd D. Johnston & Patrick M. O'Malley, 1999. "Do Higher Cigarette Prices Encourage Youth to Use Marijuana?," NBER Working Papers 6939, National Bureau of Economic Research, Inc.
  7. Henry Saffer & Frank Chaloupka, 1995. "The Demand for Illicit Drugs," NBER Working Papers 5238, National Bureau of Economic Research, Inc.
  8. Rosalie Liccardo Pacula & Michael Grossman & Frank J. Chaloupka & Patrick M. O’Malley & Lloyd D. Johnston & Matthew C. Farrelly, 2001. "Marijuana and Youth," NBER Chapters, in: Risky Behavior among Youths: An Economic Analysis, pages 271-326 National Bureau of Economic Research, Inc.
    • R. L. Pacula & M. Grossman & F. J. Chaloupka & P. M. O'Malley & L. Johnston & M. C. Farrelly, 2000. "Marijuana and Youth," NBER Working Papers 7703, National Bureau of Economic Research, Inc.
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Cited by:
  1. Hans Olav Melberg & Anne Line Bretteville-Jensen & Andrew M. Jones, 2007. "Is cannabis a gateway to hard drugs?," Health, Econometrics and Data Group (HEDG) Working Papers 07/01, HEDG, c/o Department of Economics, University of York.
  2. Pudney, Stephen & Bryan, Mark & DelBono, Emilia, 2013. "Licensing and regulation of the cannabis market in England and Wales: Towards a cost-benefit analysis," MPRA Paper 50365, University Library of Munich, Germany.
  3. Xueyan Zhao & Mark Harris, 2004. "Modelling Tobacco Consumption with a Zero-Inflated Ordered Probit Model," Econometric Society 2004 Australasian Meetings 363, Econometric Society.
  4. Ours, J.C. van & Williams, J., 2005. "Cannabis Prices and Dynamics of Cannabis Use," Discussion Paper 2005-52, Tilburg University, Center for Economic Research.
  5. Anne Bretteville-Jensen, 2006. "Drug Demand – Initiation, Continuation and Quitting," De Economist, Springer, vol. 154(4), pages 491-516, December.

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