Retail Marijuana Deregulation and Housing Prices
53 Pages Posted: 9 Mar 2020 Last revised: 10 Jun 2020
Date Written: June 9, 2020
Despite federal law, twelve American states and Washington D.C. have legalized recreational marijuana since 2012. Using a national housing data set from the online real estate listing database Zillow.com, we identify the cross and inter-state eﬀects of marijuana legalization on house prices in diﬀerent points of the price distribution function. We ﬁnd positive eﬀects upwards of ten percent in the top half of the price distribution following successful legalization ballot initiatives, and between ﬁve and ﬁfteen percent across the distribution after the state enacts the ballot initiative and the ﬁrst legal sales take place. A spatial diﬀerence-in-diﬀerences model reveals that within Colorado and Washington, prices in neighborhoods with new dispensary openings nearby experience a seven percent price appreciation. To summarize, our results suggest that there are second order beneﬁts to marijuana legalization.
Keywords: Retail Marijuana Legalization, Housing, Cross-State Analysis, Spatial Analysis, Urban Development
JEL Classification: R21, R11, R12, R52, O18
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