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

Kenneth Clements, Mert Daryal and Yihui Lan ()
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Mert Daryal: Department of Economics, The University of Western Australia
Yihui Lan: Department of Economics, The University of Western Australia

No 05-14, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

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.

Keywords: Legalisation; marijuana; alcohol (search for similar items in EconPapers)
JEL-codes: D11 D12 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2005-02
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