Recent studies have shown that efforts to curb youths’ alcohol use, such as increasing the price of alcohol or limiting youths’ access, have succeeded but may have had the unintended consequence of increasing marijuana use. This possibility is troubling in light of the doubling of teen marijuana use from 1990 to 1997. What impact will recent increases in cigarette prices have on the demand for other substances, such as marijuana? To better understand how the demand for marijuana and tobacco responds to changes in the policies and prices that affect their use, we explore the National Household Survey on Drug Abuse (NHSDA) from 1990 to 1996. We find evidence that both higher fines for marijuana possession and increased probability of arrest decrease the probability that a young adult will use marijuana. We also find that higher cigarette taxes appear to decrease the intensity of marijuana use and may have a modest negative effect on the probability of use among males.
The joint demand for cigarettes and marijuana: Evidence from the National Household Surveys on Drug Abuse