A. Ramirez-Hassan, C. Gomez, S. Velasquez, K. Tangarife
arXiv 6 Jun 2023 · General Economics · 1 citations (OpenAlex)
arXiv:2306.10031 · PDF · DOI · OpenAlex · Extracted main text
Cannabis is the most common illicit drug, and understanding its demand is relevant to analyze the potential implications of its legalization. This paper proposes an endogenous three-part model taking into account incidental truncation and access restrictions to study demand for marijuana in Colombia, and analyze the potential effects of its legalization. Our application suggests that modeling simultaneously access, intensive and extensive margin is relevant, and that selection into access is important for the intensive margin. We find that younger men that have consumed alcohol and cigarettes, living in a neighborhood with drug suppliers, and friends that consume marijuana face higher probability of having access and using this drug. In addition, we find that marijuana is an inelastic good (-0.45 elasticity). Our results are robust to different specifications and definitions. If marijuana were legalized, younger individuals with a medium or low risk perception about marijuana use would increase the probability of use in 3.8 percentage points, from 13.6% to 17.4%. Overall, legalization would increase the probability of consumption in 0.7 p.p. (2.3% to 3.0%). Different price settings suggest that annual tax revenues fluctuate between USD 11.0 million and USD 54.2 million, a potential benchmark is USD 32 million.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Jacobi, L. and Sovinsky, M (2016) Marijuana on main street? estimating demand in markets with limited access | 1.000 | 8 | 5 | 100% |
| 2 | Kandel, D (1975) Stages in adolescent involvement in drug use | 0.843 | 3 | 3 | 100% |
| 3 | Kandel, D. B., Yamaguchi, K., and Chen, K (1992) Stages of progression in drug involvement from adolescence to adulthood: further evidence for the gateway theory | 0.843 | 3 | 3 | 100% |
| 4 | Rubin-Kahana, D., Crépault, J.-F., Matheson, J., and Foll, B. L (2022) The impact of cannabis legalization for recreational purposes on youth: A narrative review of the canadian experience | 0.644 | 4 | 1 | 100% |
| 5 | Davis, A. J., Geisler, K. R., and Nichols, M. W (2016) The price elasticity of marijuana demand: evidence from crowd-sourced transaction data | 0.644 | 2 | 2 | 100% |
| 6 | Gallet, C. A (2014) Can price get the monkey off our back? a meta-analysis of illicit drug demand | 0.644 | 2 | 2 | 100% |
| 7 | Riley, S., Vellios, N., and van Walbeek, C (2020) An economic analysis of the demand for cannabis: some results from south africa | 0.644 | 2 | 2 | 100% |
| 8 | Sukharomana, R. and Chang, C. L (2017) Demand for narcotics in thailand, with policy implications | 0.644 | 2 | 2 | 100% |
| 9 | Lloyd, C (2013) The stigmatization of problem drug users: A narrative literature review | 0.644 | 2 | 2 | 100% |
| 10 | Roffman, R (2016) Legalization of cannabis in washington state: how is it going? | 0.585 | 3 | 1 | 100% |
Showing the top 10 of 65 scored citations.
arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.
| Citing paper | Intensity | Mentions | Sections | |
|---|---|---|---|---|
| 1 | EASI Drugs in the Streets of Colombia: Heterogeneous Drug Preferences and Marijuana Legalization | 0.811 | 4 | 2 |