JOINT DEMAND FOR ALCOHOL, TOBACCO, AND MARIJUANA

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Recent studies have shown that efforts to curb alcohol use by limiting youth's access and/or increasing the price of alcohol have succeeded in decreasing alcohol use, but may have had the unintended consequence of increasing marijuana use. These results are more troubling given a recent government report that shows that marijuana use among teens nearly doubled between 1990 and 1995. To better understand how the patterns of drug use among widely used substances such as alcohol, tobacco, and marijuana respond to changes in the policies that affect these substances, we propose to explore a rich database on drug use-the National Household-Survey on Drug Abuse (NHSDA). The NHSDA asks respondents detailed questions about their experiences with alcohol, tobacco, and marijuana and their access to marijuana. We will merge state-level data on the prices of marijuana, alcohol, and tobacco and state-level laws and policies that affect their use into the NHSDA to explore how the use of these substances changes in response to prices and policies. To answer several research questions, we will estimate the demand for marijuana among youths age 12 to 20 as a function of the price of marijuana, alcohol, and tobacco and state policies while controlling for state-specific characteristics. First, we will determine whether or not marijuana use is sensitive to the price of marijuana, alcohol; and tobacco. Second, we will determine whether or not the changes in the price and policies affecting one good (i.e., alcohol) affect the use of other substances (i.e., marijuana). The results of this study will help guide the creation of comprehensive policies that curb the use of alcohol, tobacco, and marijuana in two ways: they will clarify the dynamics and interactions of alcohol, tobacco, and marijuana use in response to government policies; and they will quantify the effects of policies aimed at curbing the use of each substance, allowing policymakers to evaluate alternative policy options.