The Pot Rush: Is Legalized Marijuana a Positive Local Amenity?

Abstract

This paper examines the amenity value of legalized marijuana by analyzing the impact of marijuana legalization on migration to Colorado. Colorado is the pioneering state in this area having legalized medical marijuana in 2000 and recreational marijuana in 2012. We test whether potential migrants to Colorado view legalized marijuana as a positive or negative local amenity. We use the synthetic control methodology to examine in‐ and out‐migration to/from Colorado versus migration to/from counterfactual versions of Colorado that have not legalized marijuana. We find strong evidence that potential migrants view legalized marijuana as a positive amenity with in‐migration significantly higher in Colorado compared with synthetic‐Colorado after the writing of the Ogden memo in 2009 that effectively allowed state laws already in place to be activated, and additionally after marijuana was legalized in 2013 for recreational use. When we employ permutation methods to assess the statistical likelihood of our results given our sample, we find that Colorado is a clear and significant outlier. We find no evidence for changes in out‐migration from Colorado suggesting that marijuana legalization did not change the equilibrium for individuals already living in the state. (JEL I18, R23, K42, C22)

From high school to higher education: Is recreational marijuana a consumption amenity for US college students?

“…6 Goodman-Bacon (2021) decompositions indicate that the estimates are driven by early policy adopters and mostly driven by the RM and non-RM states part of the decomposition. These findings are consistent with those of Cheng et al (2018), Zambiasi and Stillman (2020) and Hodge and Hazel (2022) that respectively indicate RML leads to a 6% increase in Colorado's housing values, approximately a 10%-20% increase in in-migration to Colorado, and up to a 6% increase in per-capita taxable food sales in Washington.…”

“…However, measuring the value of amenities for location choice is challenging because it involves accounting for various confounding and even dynamic factors. Due to this difficulty, a large literature including Mayer and Trevien (2017), Zambiasi and Stillman (2020), Chen et al. (2022) relies on natural experiments that exploit an exogenous shock to amenities' value 1…”

“…However, measuring the value of amenities for location choice is challenging because it involves accounting for various confounding and even dynamic factors. Due to this difficulty, a large literature including Mayer and Trevien (2017), Zambiasi and Stillman (2020), Chen et al (2022) relies on natural experiments that exploit an exogenous shock to amenities' value. 1 Related literature focuses on limited geographical locations and uses student-level data or natural experiments to examine how marijuana use affects educational performance, including standardized grades (Marie & Zölitz, 2017;Wright & Krieg, 2020), quantity and quality of applicants (Blake et al, 2023), time to graduation (Arria et al, 2015), school failure (Duarte et al, 2006), and dropout rate or truancy (Roebuck et al, 2004;Suerken et al, 2016).…”

The effects of recreational cannabis access on labor markets: evidence from Colorado

“…We find that our results are generally robust to these alternative specifications. Including population increases the standard errors for the outcomes for overall and service-providing employees; reduced precision is consistent with population changing in response to cannabis access (Zambiasi and Stillman, 2020). 23 County-month fixed effects have little effect on the statistical significance or magnitude of the coefficients.…”

Crime in a Time of Cannabis: Estimating the Effect of Legalizing Marijuana on Crime Rates in Colorado and Washington Using the Synthetic Control Method

“…In general it also seems that residents of decriminalized states feel legalization is more beneficial than detrimental through the creation of marijuana industry jobs (Quinton, 2017), reduction of prior marijuana criminal history impacts through retroactive reform application (Thompson, 2017), revenue building for health care, substance abuse prevention and treatment programs, the investment in state public schools, and toward improvements in education, prevention, and research (Colorado General Assembly, 2012; Washington State Treasurer, 2019), as well as increases in housing and other business development and tourism by drawing people to decriminalized states (Zambiasi & Stillman, 2020).…”