Does increasing the beer tax reduce marijuana consumption?

Three facts about marijuana prices*

“…12 There have been nine prior studies of the relationship between alcohol and marijuana consumption, eight for the USA and one for Australia (Cameron and Williams 2001). Four of the nine studies find substitutability between alcohol and marijuana (DiNardo and Lemieux 1992;Model 1993;Chaloupka and Laixuthai 1997;Cameron and Williams 2001), two find complementarity (Pacula 1997(Pacula , 1998, one finds the relationship to be mostly complementarity (Saffer and Chaloupka 1998), while two are inconclusive (Thies and Register 1993;Saffer and Chaloupka 1995). Therefore, while these studies do not give a completely unambiguous picture, the weight of the evidence seems to point to alcohol and marijuana being substitutes, which is not inconsistent with the PI assumption.…”

The Effects of Prices and Policies on the Demand for Marijuana: Evidence from the National Household Surveys on Drug Abuse

“…More recently, Pacula (1998) uses the 1984 wave of the NLSY to estimate the joint demand for both alcohol and marijuana using a sample of roughly 5,000 individuals. Pacula estimates both alcohol and marijuana demand directly and shows that increasing beer taxes decreases the prevalence and consumption of alcohol and decreases the prevalence of marijuana use.…”

“…The dramatic increase in marijuana use poses new challenges to decision-makers developing policies to curb drug use among youths. Further complicating efforts to create effective drug control policies are cross-sectional studies that show an interdependence between alcohol and marijuana use (DiNardo and Lemieux, 1992;Chaloupka and Laixuthai, 1997;Pacula, 1998;Model, 1993). The results of these studies emphasize the importance of understanding the interdependence of widely used substances such as alcohol, tobacco, and marijuana and suggest that policies affecting one substance may have unintended consequences on the others.…”

Randomized Trial of Reduced-Nicotine Standards for Cigarettes

“…Her estimates are con sistent with the gateway hypothesis; that is, higher past cigarette prices (which are expected to reduce past ciga rette smoking) reduce the likelihood that a young adult currently uses marijuana. However, she finds no rela tionship between contemporaneous cigarette prices and marijuana use (Pacula 1998b). Chaloupka and colleagues (1999) used data from the 1992 through 1994 Monitoring the Future surveys of 8th-, 10th-, and 12th grade students to examine the relationship between current cigarette prices and current cigarette smoking and marijuana use.…”