Marijuana and Alcohol Evidence Using Border Analysis and Retail Sales Data

We use retail scanner data on purchases of alcoholic beverages across US counties for 2006-2015 to study the link between medical marijuana laws (MMLs) and alcohol consumption. To do this we first exploit differences in the timing of marijuana laws among states and find that they are substitutes. We show that unlike traditional national-level analysis, focusing on contiguous border county-pairs provides unbiased estimates of the effect of MMLs on alcohol sales. Specifically, counties located in MML states reduced monthly alcohol sales by 12.4 percent. Results are robust to including placebo effective dates for MMLs in treated states.

Keywords: Alcohol, Border Analysis, Difference-In-Difference, Medical Marijuana Laws, US Counties.

JEL Classification: I18, K32

Suggested Citation: Suggested Citation

Baggio, Michele and Chong, Alberto and Kwon, Sungoh, Marijuana and Alcohol Evidence Using Border Analysis and Retail Sales Data (August 23, 2018). Available at SSRN: https://ssrn.com/abstract=3063288 or http://dx.doi.org/10.2139/ssrn.3063288