Marijuana is the most common illicit drug with vocal advocates for legalization. Among other things, legalization would increase access and remove the stigma of illegality. Our model disentangles the role of access from preferences and shows that selection into access is not random. We find that traditional demand estimates are biased resulting in incorrect policy conclusions. If marijuana were legalized, those under 30 would see modest increases in use of 28 percent, while on average use would increase by 48 percent (to 19.4 percent). Tax policies are effective at curbing use, where Australia could raise AU$1 billion (and the United States US$12 billion). (JEL D12, H25, K14, K42)
This paper describes and analyzes research on the dynamics of longterm care and suggests directions for the literature to make progress. We discuss sources and causes of dynamics including inertia/state dependence (confounded by unobserved heterogeneity); match-speci…c e¤ects; and costs of changing caregivers. We comment on causes of dynamics including learning/human capital accumulation; burnout; and gameplaying. We suggest how to deal with endogenous geography; dynamics in discrete and continuous choices; and equilibrium issues (multiple equilibria, dynamic equilibria). Next, we evaluate the advantages of di¤erent potential data sources (NLTCS, PSID, AHEAD/HRS, SHARE, ELSA) and identify …rst order data problems including noisy measures of wealth and family structure. We suggest some methods to handle econometric problems such as endogeneity (work, geography) and measurement error. Finally, we discuss potential policy implications of dynamics including the e¤ect of dynamics on parameter estimates and direct policy implications of inertia (implications for family welfare, parent welfare, child welfare, and cost of government programs).
ΑβστραχτΩε εστιµατε δψναµιχ µοδελσ οφ ελδερ−χαρε αρρανγεµεντσ υσινγ δατα φροµ τηε Ασσετσ ανδ Ηεαλτη ∆ψναµιχσ Αµονγ τηε Ολδεστ Ολδ Συρϖεψ. Ωε µοδελ τηε υσε οφ ινστιτυτιοναλ χαρε, φορµαλ ηοµε ηεαλτη χαρε, χαρε προϖιδεδ βψ α χηιλδ, ανδ χαρε προϖιδεδ βψ α σπουσε ιν τηε σελεχτιον οφ εαχη χαρε αρρανγεµεντ, τηε πριµαρψ αρρανγεµεντ, ανδ ηουρσ ιν εαχη αρρανγεµεντ. Ουρ ρεσυλτσ ινδιχατε τηατ βοτη οβσερϖεδ ηετερογενειτψ ανδ τρυε στατε δεπενδενχε πλαψ ρολεσ ιν τηε περσιστενχε οφ χαρε αρρανγεµεντσ. Ωε νδ τηατ ποσιτιϖε στατε δεπενδενχε (ι.ε., ινερτια) δοµινατεσ χαρεγιϖερ βυρνουτ, ανδ τηατ φορµαλ χαρε δεχισιονσ δεπενδ ον τηε χοστ ανδ θυαλιτψ οφ χαρε. ϑΕΛ Χλασσιχατιον: Χ51, Χ61, ϑ14 Κεψωορδσ: ∆ψναµιχ Μοδελσ, Λονγ−Τερµ Χαρε, Ηοµε Ηεαλτη Χαρε, Ινφορµαλ Χαρε 1 Γοερεε: Υνιϖερσιτψ οφ Ζυριχη (εµαιλ: µιχηελλεσ.γοερεε≅εχον.υζη.χη); Ηιεδεµανν: Σεαττλε Υνιϖερσιτψ (εµαιλ: βγη≅σεαττλευ.εδυ); Στερν: Υνιϖερσιτψ οφ ςιργινια (εµαιλ: σνσ5ρ≅εσερϖιχεσ.ϖιργινια.εδυ). Τηε χορρε− σπονδινγ αυτηορ ισ Στεϖεν Στερν. Ωε ωουλδ λικε το τηανκ Λιλιανα Πεζζιν, χονφερενχε παρτιχιπαντσ ατ τηε 2010 Ιντερνατιοναλ Χονφερενχε ον Εϖιδενχε−βασεδ Πολιχψ ιν Λονγ−τερµ Χαρε, τηε 2011 Αννυαλ Μεετινγσ οφ τηε Ποπυλατιον Ασσοχιατιον οφ Αµεριχα, ανδ ωορκσηοπ παρτιχιπαντσ ατ ΙΡ∆ΕΣ (Παρισ), Υνιϖερσιτψ οφ Μιχηιγαν, Πεκινγ Υνιϖερσιτψ, ανδ Τσινγηυα Υνιϖερσιτψ φορ ηελπφυλ χοµµεντσ. Αλλ ρεµαινινγ ερρορσ αρε ουρσ.
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