Marijuana and Alcohol Evidence Using Border Analysis and Retail Sales Data
39 Pages Posted: 2 Nov 2017 Last revised: 25 Aug 2018
Date Written: August 23, 2018
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