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

24 Pages Posted: 2 Apr 2018

See all articles by Diego Zambiasi

Diego Zambiasi

University of the Basque Country

Steven Stillman

Free University of Bozen-Bolzano; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

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.

Keywords: marijuana legalization, interstate migration, synthetic controls

JEL Classification: I18, R23, K42, C22

Suggested Citation

Zambiasi, Diego and Stillman, Steven, The Pot Rush: Is Legalized Marijuana a Positive Local Amenity?. IZA Discussion Paper No. 11392, Available at SSRN: https://ssrn.com/abstract=3153356

Diego Zambiasi (Contact Author)

University of the Basque Country

Barrio Sarriena s/n
Leioa, 48940
Spain

Steven Stillman

Free University of Bozen-Bolzano ( email )

Via Sernesi 1
39100 Bozen-Bolzano (BZ), Bozen 39100
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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