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Do Higher Cigarette Prices Encourage Youth to Use Marijuana?

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Author Info
Frank J. Chaloupka
Rosalie Liccardo Pacula
Matthew C. Farrelly
Lloyd D. Johnston
Patrick M. O'Malley

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Abstract

Every major national tobacco legislation proposed in the past two years has called for significant increases in the price of cigarettes as a way to discourage youths from smoking. One argument used to oppose these bills is that increases in the price of cigarettes would cause youths to substitute marijuana for cigarettes. Although it has long been believed that cigarettes are a gateway drug,' no economic research has been done to determine whether cigarettes and marijuana are economic complements or substitutes. This paper begins to fill the void in the current research by examining the contemporaneous relationship between the demands for cigarettes and marijuana among a nationally representative sample of 8th, 10th and 12th graders from the 1992-1994 Monitoring the Future Project. Two part models are used to estimate reduced form demand equations. Examination of the cross-price effects clearly shows that higher cigarette prices will not increase marijuana use among youths. In addition to reducing youth smoking, we find that higher cigarette prices significantly reduce the average level of marijuana used by current users. Cigarette prices also have a negative effect on the probability of using marijuana findings are not significant at conventional levels.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6939.

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Date of creation: Feb 1999
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Handle: RePEc:nbr:nberwo:6939

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I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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  1. Valerie Lechene & Jerome Adda, 2004. "On the Identification of the Effect of Smoking on Mortality," Economics Series Working Papers 184, University of Oxford, Department of Economics. [Downloadable!]
    Other versions:
  2. Bin Ke & Kathy Petroni & Douglas A. Shackelford, 1999. "The Impact of State Taxes on Self-Insurance," NBER Working Papers 7453, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Rosalie Liccardo Pacula & Jamie F. Chriqui & Joanna King, 2003. "Marijuana Decriminalization: What does it mean in the United States?," NBER Working Papers 9690, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
  5. Kenneth W Clements & Yihui Lan & Xueyan Zhao, 2006. "The Demand for Vice: Inter-Commodity Interactions with Uncertainty," Economics Discussion / Working Papers 06-30, The University of Western Australia, Department of Economics. [Downloadable!]
    Other versions:
  6. J. Williams, 2004. "The effects of price and policy on marijuana use: what can be learned from the Australian experience?," Health Economics, John Wiley & Sons, Ltd., vol. 13(2), pages 123-137. [Downloadable!]
  7. 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)
  8. Matthew C. Farrelly & Jeremy W. Bray & Gary A. Zarkin & Brett W. Wendling & Rosalie Liccardo Pacula, 1999. "The Effects of Prices and Policies on the Demand for Marijuana: Evidence from the National Household Surveys on Drug Abuse," NBER Working Papers 6940, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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