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Cannabis Prices and Dynamics of Cannabis Use

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  • van Ours, Jan C
  • Williams, Jenny

Abstract

This paper uses duration models and self-reported cannabis histories from young Australians to study the dynamics of cannabis use. We find that low cannabis prices are associated with early initiation into cannabis use. While the decision to quit does not appear to be directly influenced by price, we find that the younger an individual is when they start using cannabis the less likely they are to quit. Therefore, low cannabis prices lead to early use and because of that they lead to a low quit rate and hence a longer duration of use.

Suggested Citation

  • van Ours, Jan C & Williams, Jenny, 2005. "Cannabis Prices and Dynamics of Cannabis Use," CEPR Discussion Papers 4991, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:4991
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Review: Drugs – Without the Hot Air (David Nutt)
      by Sam Watson in The Academic Health Economists' Blog on 2013-02-14 18:53:56

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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. Jakub Cerveny & Jan van Ours, 2019. "Cannabis Prices on the Dark Web," Tinbergen Institute Discussion Papers 19-059/V, Tinbergen Institute.
    3. Ali Palali & Jan C. van Ours, 2015. "Distance to Cannabis Shops and Age of Onset of Cannabis Use," Health Economics, John Wiley & Sons, Ltd., vol. 24(11), pages 1483-1501, November.
    4. van Ours, J.C., 2011. "The Long and Winding Road to Cannabis Legalization," Discussion Paper 2011-126, Tilburg University, Center for Economic Research.
    5. 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.
    6. Tauchmann, Harald, 2008. "West-East Convergence in the Prevalence of Illicit Drugs: Socioeconomics or Culture?," Economics Discussion Papers 2008-8, Kiel Institute for the World Economy (IfW).
    7. van Ours, Jan C. & Williams, Jenny, 2012. "The effects of cannabis use on physical and mental health," Journal of Health Economics, Elsevier, vol. 31(4), pages 564-577.
    8. Jan C. van Ours, 2006. "Dynamics in the use of drugs," Health Economics, John Wiley & Sons, Ltd., vol. 15(12), pages 1283-1294, December.
    9. Williams, J. & van Ours, J.C. & Grossmann, M., 2011. "Why Do Some People Want to Legalize Cannabis Use?," Discussion Paper 2011-007, Tilburg University, Center for Economic Research.
    10. Cerveny, Jakub & van Ours, Jan C., 2019. "Cannabis Prices on the Dark Web," CEPR Discussion Papers 13933, C.E.P.R. Discussion Papers.
    11. Tauchmann, Harald, 2008. "West-East Convergence in the Prevalence of Cannabis Use: Socioeconomics or Culture?," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 2, pages 1-27.
    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. Bryan, Mark L. & Del Bono, Emilia & Pudney, Stephen, 2013. "Drug-related crime," ISER Working Paper Series 2013-08, Institute for Social and Economic Research.
    15. Červený, Jakub & van Ours, Jan C., 2019. "Cannabis prices on the dark web," European Economic Review, Elsevier, vol. 120(C).
    16. Jan C. van Ours & Jenny Williams, 2011. "Cannabis use and mental health problems," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(7), pages 1137-1156, November.
    17. Anne Line Bretteville‐Jensen & Liana Jacobi, 2011. "Climbing the drug staircase: a Bayesian analysis of the initiation of hard drug use," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(7), pages 1157-1186, November.
    18. repec:zbw:rwirep:0061 is not listed on IDEAS
    19. Harald Tauchmann, 2008. "West-East Convergence in the Prevalence of Illicit Drugs: Socioeconomics or Culture?," Ruhr Economic Papers 0061, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    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. Kelly, Elaine & Rasul, Imran, 2014. "Policing cannabis and drug related hospital admissions: Evidence from administrative records," Journal of Public Economics, Elsevier, vol. 112(C), pages 89-114.
    22. Beau Kilmer & Rosalie Liccardo Pacula, 2010. "Preventing Drug Use," NBER Chapters, in: Targeting Investments in Children: Fighting Poverty When Resources are Limited, pages 181-220, National Bureau of Economic Research, Inc.
    23. 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.
    24. Muhammad Salar Khan & Paul N. Thompson & Victor J. Tremblay, 2020. "Marijuana tax incidence, stockpiling, and cross-border substitution," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(1), pages 103-127, February.

    More about this item

    Keywords

    age of initiation; cannabis prices; cannabis use;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I19 - Health, Education, and Welfare - - Health - - - Other

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