Changes in Alcohol and Tobacco Consumption in Response to Medical and Recreational Cannabis Legalization: Evidence from U.S. State Tax Receipt Data
35 Pages Posted: 26 Feb 2019
Date Written: February 19, 2019
Background: Whether medical or recreational cannabis legalization has impacts on alcohol or cigarette consumption is a key question as cannabis policy evolves, given the adverse health effects of these substances. However, relatively little research has examined this question. The objective of this study was to examine whether medical or recreational cannabis legalization was associated with any change in state-level alcohol or cigarette consumption.
Methods: Dependent variables included state-level aggregate consumption of alcohol and cigarettes from all 50 states, estimated from state tax receipts. Independent variables included indicators for medical and recreational legalization policies. Three different types of indicators were separately used to model medical cannabis policies. Indicators for the primary model were based on the presence of active medical cannabis dispensaries. Secondary models used indicators based on either the presence of a more liberal medical cannabis policy (“non-medicalized”) or the presence of any medical cannabis policy. Difference-in-difference regression models were applied to estimate associations for each type of policy.
Results: Primary models found no statistically significant associations between medical or recreational cannabis legalization policies and either alcohol or cigarette consumption. In a secondary model, both medical and recreational policies were associated with significantly decreased cigarette consumption compared to states with no medical cannabis policy. However, post-hoc analyses demonstrated that these reductions were apparent at least two years prior to policy adoption, indicating that they likely result from other time-varying characteristics of legalization states, and are not direct effects of the cannabis policy. Estimates were sensitive to inclusion of state-level covariates, such as demographics and other policy variables, and evidence for differential trends in tobacco consumption were apparent.
Conclusion: We found no evidence of a causal association between medical or recreational cannabis legalization and changes in either alcohol or cigarette consumption.
Keywords: cannabis, marijuana, tobacco, alcohol, policy, substitution, complementarity
JEL Classification: I12, I18, I14
Suggested Citation: Suggested Citation