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Two Short Papers on Marijuana, Legalisation and Drinking: (1) Exogeneous Shocks and Related Goods: Drinking and the Legalisation of Marijuana; and (2) Notes on Projections of Alcohol Consumption Following Marijuana Legalisation

Author

Listed:
  • Kenneth W. Clements

    () (Department of Economics, The University of Western Australia)

  • Mert Daryal

    (Department of Economics, The University of Western Australia)

  • Yihui Lan

    () (Department of Economics, The University of Western Australia)

Abstract

(1) The paper uses the substitutability between goods to model the transmission to other products of a consumption shock to one product. The framework is used to analyse the impact on drinking of legalisation of marijuana. For all types of consumers for example, the results indicate that legalisation would led to approximately a 4-percent increase in marijuana consumption, while beer, wine and spirits consumption would fall by 1 percent, 2 percent and almost 4 percent, respectively. And; (2) Clements and Daryal (2005) develop a utility-maximising theory of how exogenous shocks to one market have implications for the consumption of related goods, and applied that theory to analyse the impacts on drinking of possible legalisation of marijuana. These notes set out the derivations of the standard errors of their projections.

Suggested Citation

  • Kenneth W. Clements & Mert Daryal & Yihui Lan, 2005. "Two Short Papers on Marijuana, Legalisation and Drinking: (1) Exogeneous Shocks and Related Goods: Drinking and the Legalisation of Marijuana; and (2) Notes on Projections of Alcohol Consumption Follo," Economics Discussion / Working Papers 05-14, The University of Western Australia, Department of Economics.
  • Handle: RePEc:uwa:wpaper:05-14
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    File URL: http://www.biz.uwa.edu.au/home/research/discussionworking_papers/economics/2005?f=148846
    File Function: First version, 2005
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    More about this item

    Keywords

    Legalisation; marijuana; alcohol;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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