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Abstract

In this study we use data from the National Longitudinal Survey of Youth (NLSY). We estimate the relationship between high school graduation, and alcohol and marijuana use among the sample of high school students. We also estimate these students' demand determinants for each of these substances. Our results show that there are significant adverse effects of alcohol and marijuana use on high school graduation. In addition, we find that beer taxes, minimum drinking age laws and marijuana decriminalization have a significant impact on the demand for these substances. Our findings have important policy implications. We find that a ten percent increase in beer tax, reduces alcohol consumption among high school students, which in turn raises the probability of high school graduation by about 3.7 percent. Further, a ten percent increase in liquor prices, raises the probability of high school graduation by 6.6 to 8.2 percent. Raising the minimum drinking age for liquor also reduces liquor and wine consumption, and consequently, improves the probability of high school graduation.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4497.

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Date of creation: Oct 1993
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Handle: RePEc:nbr:nberwo:4497

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• I10 - Health, Education, and Welfare - - Health - - - General

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1. Cook, Philip J. & Moore, Michael J., 1993. "Drinking and schooling," Journal of Health Economics, Elsevier, vol. 12(4), pages 411-429, December.
2. Michael Grossman, 1990. "Health Benefits of Increases in Alcohol and Cigarette Taxes," NBER Working Papers 3082, National Bureau of Economic Research, Inc.
3. Frank J. Chaloupka & Adit Laixuthai, 1997. "Do Youths Substitute Alcohol and Marijuana? Some Econometric Evidence," Eastern Economic Journal, Eastern Economic Association, vol. 23(3), pages 253-276, Summer.
   
   • Frank J. Chaloupka & Adit Laixuthai, 1994. "Do Youths Substitute Alcohol and Marijuana? Some Econometric Evidence," NBER Working Papers 4662, National Bureau of Economic Research, Inc.
4. Charles A. Register & Donald R. Williams, 1992. "Labor market effects of marijuana and cocaine use among young men," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(3), pages 435-451, April.
5. John DiNardo & Thomas Lemieux, 1992. "Alcohol, Marijuana, and American Youth: The Unintended Effects of Government Regulation," NBER Working Papers 4212, National Bureau of Economic Research, Inc.
6. Douglas Coate & Michael Grossman, 1988. "Effects of Alcoholic Beverage Prices and Legal Drinking Ages on Youth Alcohol Use," NBER Working Papers 1852, National Bureau of Economic Research, Inc.
   
   • Coate, Douglas & Grossman, Michael, 1988. "Effects of Alcoholic Beverage Prices and Legal Drinking Ages on Youth Alcohol Use," Journal of Law and Economics, University of Chicago Press, vol. 31(1), pages 145-71, April.
7. Gary S.Grossman Becker & Michael Murphy & Kevin M., 1991. "Rational Addiction and the Effect of Price on Consumption," University of Chicago - George G. Stigler Center for Study of Economy and State 68, Chicago - Center for Study of Economy and State.
   
   • Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1991. "Rational Addiction and the Effect of Price on Consumption," American Economic Review, American Economic Association, vol. 81(2), pages 237-41, May.
8. Adit Laixuthai & Frank J. Chaloupka, 1993. "Youth Alcohol Use and Public Policy," NBER Working Papers 4278, National Bureau of Economic Research, Inc.
   
   • Adit Laixuthai & Frank J. Chaloupka, 1993. "Youth Alcohol Use And Public Policy," Contemporary Economic Policy, Western Economic Association International, vol. 11(4), pages 70-81, October.
9. Manski, C.F. & Sandefur, G.D. & Mclanahan, S. & Powers, D., 1990. "Alternative Estimates Of The Effect Of Family Stucture During Adolescence On Hight School Graduation," Working papers 90-31, Wisconsin Madison - Social Systems.
10. Henry Saffer, 1992. "Alcohol Advertising Bans and Alcohol Abuse: An International Perspective," NBER Working Papers 3052, National Bureau of Economic Research, Inc.
    
    • Saffer, Henry, 1991. "Alcohol advertising bans and alcohol abuse: An international perspective," Journal of Health Economics, Elsevier, vol. 10(1), pages 65-79, May.

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Cited by:

1. Jeremy W. Bray & Gary A. Zarkin & Chris Ringwalt & Junfeng Qi, 2000. "The relationship between marijuana initiation and dropping out of high school," Health Economics, John Wiley & Sons, Ltd., vol. 9(1), pages 9-18.
2. Pinka Chatterji & Jeff DeSimone, 2005. "Adolescent Drinking and High School Dropout," NBER Working Papers 11337, National Bureau of Economic Research, Inc.
3. Catalina Amuedo-Dorantes & Traci Mach, 2002. "The Impact of Families on Juvenile Substance Use," Journal of Bioeconomics, Springer, vol. 4(3), pages 269-282, October.
4. van Ours, Jan C & Williams, Jenny, 2007. "Why Parents Worry: Initiation into Cannabis Use by Youth and their Educational Attainment," CEPR Discussion Papers 6449, C.E.P.R. Discussion Papers.
   
   • van Ours, Jan C. & Williams, Jenny, 2009. "Why parents worry: Initiation into cannabis use by youth and their educational attainment," Journal of Health Economics, Elsevier, vol. 28(1), pages 132-142, January.
   • Ours, J.C. van & Williams, J., 2007. "Why Parents Worry: Initiation into Cannabis use by Youth and their Educational Attainment," Discussion Paper 2007-60, Tilburg University, Center for Economic Research.
   • Jan C. van Ours & Jenny Williams, 2007. "Why Parents Worry: Initiation into Cannabis Use by Youth and their Educational Attainment," Department of Economics - Working Papers Series 1013, The University of Melbourne.
5. Daniel F. McCaffrey & Rosalie Liccardo Pacula & Bing Han & Phyllis Ellickson, 2010. "Marijuana use and high school dropout: the influence of unobservables," Health Economics, John Wiley & Sons, Ltd., vol. 19(11), pages 1281-1299.
6. Pinka Chatterji, 2006. "Illicit drug use and educational attainment," Health Economics, John Wiley & Sons, Ltd., vol. 15(5), pages 489-511.
   
   • Pinka Chatterji, 2003. "Illicit Drug Use and Educational Attainment," NBER Working Papers 10045, National Bureau of Economic Research, Inc.
7. Sander, William, 1998. "The effects of schooling and cognitive ability on smoking and marijuana use by young adults," Economics of Education Review, Elsevier, vol. 17(3), pages 317-324, June.
8. Pinka Chatterji & Jeffrey DeSimone, 2006. "High School Alcohol Use and Young Adult Labor Market Outcomes," NBER Working Papers 12529, National Bureau of Economic Research, Inc.
9. 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.
10. Renna, Francesco, 2008. "Teens' alcohol consumption and schooling," Economics of Education Review, Elsevier, vol. 27(1), pages 69-78, February.
11. Roebuck, M. Christopher & French, Michael T. & Dennis, Michael L., 2004. "Adolescent marijuana use and school attendance," Economics of Education Review, Elsevier, vol. 23(2), pages 133-141, April.
12. Lionel Perini & Joachim Marti, 2011. "Substance use and high school academic performance," IRENE Working Papers 11-04, IRENE Institute of Economic Research.
13. Jeff DeSimone & Amy M. Wolaver, 2005. "Drinking and Academic Performance in High School," NBER Working Papers 11035, National Bureau of Economic Research, Inc.
14. Rinaldi, Gustavo, 2007. "The use of economic tools to develop a consensus on alcohol policies within and between jurisdictions," MPRA Paper 21941, University Library of Munich, Germany, revised 18 Apr 2007.
15. Duarte, R. & Escario, J.J., 2006. "Alcohol abuse and truancy among Spanish adolescents: A count-data approach," Economics of Education Review, Elsevier, vol. 25(2), pages 179-187, April.
16. Pinka Chatterji & Sara Markowitz, 2000. "The Impact of Maternal Alcohol and Illicit Drug Use on Children's Behavior Problems: Evidence from the Children of the National Longitudinal Survey..," NBER Working Papers 7692, National Bureau of Economic Research, Inc.
17. Anderson, D. Mark & Hansen, Benjamin & Rees, Daniel I., 2012. "Medical Marijuana Laws and Teen Marijuana Use," IZA Discussion Papers 6592, Institute for the Study of Labor (IZA).
18. Balsa, Ana I. & Giuliano, Laura M. & French, Michael T., 2011. "The effects of alcohol use on academic achievement in high school," Economics of Education Review, Elsevier, vol. 30(1), pages 1-15, February.
19. Lisa Powell & Jenny Williams & Henry Wechsler, 2004. "Study habits and the level of alcohol use among college students," Education Economics, Taylor and Francis Journals, vol. 12(2), pages 135-149.
20. Rosalie Liccardo Pacula & Karen E. Ross & Jeanne Ringel, 2003. "Does Marijuana Use Impair Human Capital Formation?," NBER Working Papers 9963, National Bureau of Economic Research, Inc.

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