More than Joints: Multi-Substance Use, Choice Limitations, and Policy Implications

Michelle Sovinsky, Liana Jacobi, Alessandra Allocca and Tao Sun

No 18693, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: As illicit substances move into the legal product space, substitution patterns with legal products become more salient. In particular, marijuana legalization may have implications for the use of other legal “sin†goods. We estimate a structural model of multi-product use of illegal and legal substances considering joint use, limited access to illicit products, and persistence in use. We focus on a young person’s choice to consume marijuana, alcohol or cigarettes (and possible combinations), and we find that sin goods are complements. Furthermore, our findings emphasize the necessity of accounting for joint consumption and access to obtain correct price sensitivity estimates. Post-legalization, youth marijuana use would increase from 25% to 37%. However, counterfactual results show that a combination of (reasonable) tax increases on all goods along with enforcement against illegal use can potentially revert use to pre-legalization levels. The earlier the tax increases are implemented the more effective they are at curbing future use. Our results inform the policy debate regarding the impact of marijuana legalization on the long-term use of sin goods.

Keywords: Complementarity; Marijuana legalisation; Limited choice sets; Data restrictions; Discrete choice models (search for similar items in EconPapers)
JEL-codes: C11 C35 D12 H2 K42 L15 L66 (search for similar items in EconPapers)
Date: 2023-12
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP18693 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:18693

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP18693

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().