The Pot Rush: Is Legalized Marijuana a Positive Local Amenity?

Diego Zambiasi and Steven Stillman

No 11392, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines the amenity value of legalized marijuana by analyzing the impact of marijuana legalization on migration to Colorado. Colorado is the pioneering state in this area having legalized medical marijuana in 2000 and recreational marijuana in 2012. We test whether potential migrants to Colorado view legalized marijuana as a positive or negative local amenity. We use the synthetic control methodology to examine in- and out-migration to/from Colorado versus migration to/from counterfactual versions of Colorado that have not legalized marijuana. We find strong evidence that potential migrants view legalized marijuana as a positive amenity with in-migration significantly higher in Colorado compared with synthetic- Colorado after the writing of the Ogden memo in 2009 that effectively allowed state laws already in place to be activated, and additionally after marijuana was legalized in 2013 for recreational use. When we employ permutation methods to assess the statistical likelihood of our results given our sample, we find that Colorado is a clear and significant outlier. We find no evidence for changes in out-migration from Colorado suggesting that marijuana legalization did not change the equilibrium for individuals already living in the state.

Keywords: interstate migration; marijuana legalization; synthetic controls (search for similar items in EconPapers)
JEL-codes: C22 I18 K42 R23 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2018-03
New Economics Papers: this item is included in nep-law, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published in: Economic Inquiry, 2020, 58 (2), 667-679

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Related works:
Journal Article: THE POT RUSH: IS LEGALIZED MARIJUANA A POSITIVE LOCAL AMENITY? (2020)
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