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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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  • J. Williams

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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  • 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, February.
    • Handle: RePEc:wly:hlthec:v:13:y:2004:i:2:p:123-137
    DOI: 10.1002/hec.796
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    Cited by:

    1. van Ours, Jan C. & Williams, Jenny, 2007. "Cannabis prices and dynamics of cannabis use," Journal of Health Economics, Elsevier, vol. 26(3), pages 578-596, May.
    2. Marian Shanahan & Alison Ritter, 2014. "Cost Benefit Analysis of Two Policy Options for Cannabis: Status Quo and Legalisation," PLOS ONE, Public Library of Science, vol. 9(4), pages 1-12, April.
    3. Jérôme Adda & Brendon McConnell & Imran Rasul, 2014. "Crime and the Depenalization of Cannabis Possession: Evidence from a Policing Experiment," Journal of Political Economy, University of Chicago Press, vol. 122(5), pages 1130-1202.
    4. Clifford F. Thies, 2012. "The Relationship Between Enforcement and the Price of Marijuana," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 28(Fall 2012), pages 79-90.
    5. Červený, Jakub & van Ours, Jan C., 2019. "Cannabis prices on the dark web," European Economic Review, Elsevier, vol. 120(C).
    6. Sarah Brown & Mark N Harris & Jake Prendergast & Preety Srivastava, 2015. "Pharmaceutical Drug Misuse, Industry of Employment and Occupation," Bankwest Curtin Economics Centre Working Paper series WP1501, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
    7. Williams, Jenny & Bretteville-Jensen, Anne Line, 2014. "Does liberalizing cannabis laws increase cannabis use?," Journal of Health Economics, Elsevier, vol. 36(C), pages 20-32.
    8. Mark N. Harris & Xueyan Zhao, 2004. "Modelling Tobacco Consumption with a Zero-Inflated Ordered Probit Model," Monash Econometrics and Business Statistics Working Papers 14/04, Monash University, Department of Econometrics and Business Statistics.
    9. D. Mark Anderson & Benjamin Hansen & Daniel I. Rees, 2015. "Medical Marijuana Laws and Teen Marijuana Use," American Law and Economics Review, Oxford University Press, vol. 17(2), pages 495-528.
    10. Clements, Kenneth W. & Daryal, Mert, 2005. "Exogenous shocks and related goods: Drinking and the legalisation of marijuana," Economics Letters, Elsevier, vol. 89(1), pages 101-106, October.
    11. Félix, Sónia & Portugal, Pedro, 2015. "Drug Decriminalization and the Price of Illicit Drugs," IZA Discussion Papers 8848, Institute of Labor Economics (IZA).
    12. Anne Bretteville-Jensen, 2006. "Drug Demand – Initiation, Continuation and Quitting," De Economist, Springer, vol. 154(4), pages 491-516, December.
    13. 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.
    14. William Greene & Mark N. Harris & Preety Srivastava & Xueyan Zhao, 2018. "Misreporting and econometric modelling of zeros in survey data on social bads: An application to cannabis consumption," Health Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 372-389, February.
    15. Bruijn, L. Michelle & Ribas, Rafael P., 2022. "“No drugs in my back yard:” The ambivalent reception of cannabis retailers," Journal of Economic Behavior & Organization, Elsevier, vol. 199(C), pages 103-121.
    16. Xueyan Zhao & Mark N. Harris, 2004. "Demand for Marijuana, Alcohol and Tobacco: Participation, Levels of Consumption and Cross‐equation Correlations," The Economic Record, The Economic Society of Australia, vol. 80(251), pages 394-410, December.
    17. Craig A. Gallet, 2014. "Can Price Get The Monkey Off Our Back? A Meta‐Analysis Of Illicit Drug Demand," Health Economics, John Wiley & Sons, Ltd., vol. 23(1), pages 55-68, January.
    18. Hans Melberg & Andrew Jones & Anne Bretteville-Jensen, 2010. "Is cannabis a gateway to hard drugs?," Empirical Economics, Springer, vol. 38(3), pages 583-603, June.
    19. Anne Line Bretteville-Jensen & Jenny Williams, 2011. "Decriminalization and Initiation into Cannabis Use," Department of Economics - Working Papers Series 1130, The University of Melbourne.
    20. Adam J. Davis & Karl R. Geisler & Mark W. Nichols, 2016. "The price elasticity of marijuana demand: evidence from crowd-sourced transaction data," Empirical Economics, Springer, vol. 50(4), pages 1171-1192, June.
    21. Mohammed Al‐Hamdani & Kayla M. Joyce & Tristan Park & Megan E. Cowie & Sherry H. Stewart, 2021. "Cannabis packaging: An opportunity for facilitating informed decisions," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(3), pages 1150-1168, September.
    22. Auriol, Emmanuelle & Mesnard, Alice & Perrault, Tiffanie, 2019. "Defeating Crime? An Economic Analysis of Cannabis Legalization Policies," CEPR Discussion Papers 13814, C.E.P.R. Discussion Papers.
    23. Preety Ramful & Xueyan Zhao, 2009. "Participation in marijuana, cocaine and heroin consumption in Australia: a multivariate probit approach," Applied Economics, Taylor & Francis Journals, vol. 41(4), pages 481-496.

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