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Substitution and Complementarity in the Consumption of Alcohol, Cannabis, and Opium

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  • Siddharth Chandra
  • Gaurav Doshi

Abstract

Understanding the behavior of populations of drug consumers has been and remains a topic of keen interest. Using a unique dataset on 25 districts from Bengal, India, from 1911 to 1925, we analyze whether populations of consumers treat alcohol, cannabis, and opium as economic substitutes or complements in a legal regime. Additionally, we examine responsiveness to prices and income. Our analysis has three main findings. First, we find evidence of substitution between alcohol and cannabis bud. Second, cannabis leaf is a complement for alcohol but a substitute for cannabis bud. Third, we find negative income elasticity for alcohol, cannabis bud, and opium consumption. These findings on the link between consumption patterns and economic factors can guide harm reduction strategies.

Suggested Citation

  • Siddharth Chandra & Gaurav Doshi, 2025. "Substitution and Complementarity in the Consumption of Alcohol, Cannabis, and Opium," Health Economics, John Wiley & Sons, Ltd., vol. 34(5), pages 827-854, May.
    • Handle: RePEc:wly:hlthec:v:34:y:2025:i:5:p:827-854
    DOI: 10.1002/hec.4938
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    1. Weiwei Chen & Johanna Catherine Maclean & Michael T. French, 2026. "Legalizing Cannabis: Implications for Child Maltreatment," NBER Working Papers 34673, National Bureau of Economic Research, Inc.

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