Retail Marijuana Deregulation and Housing Prices

51 Pages Posted: 9 Mar 2020

See all articles by Donggeun Kim

Donggeun Kim

University of Oklahoma - Department of Economics

Sean O'Connor

University of Oklahoma - Department of Economics

Brent Norwood

University of Oklahoma - Department of Economics

Date Written: February 13, 2020

Abstract

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. Considered together, this research suggests that there are second order benefits associated with marijuana legalization that policy makers and voters should be aware of when deciding the drug’s legal status.

Keywords: Marijuana legalization, housing

Suggested Citation

Kim, Donggeun and O'Connor, Sean and Norwood, Brent, Retail Marijuana Deregulation and Housing Prices (February 13, 2020). Available at SSRN: https://ssrn.com/abstract=3537860 or http://dx.doi.org/10.2139/ssrn.3537860

Donggeun Kim (Contact Author)

University of Oklahoma - Department of Economics ( email )

308 Cate Center 1
Room 336
Norman, OK OK 73019
United States
4054299238 (Phone)

Sean O'Connor

University of Oklahoma - Department of Economics ( email )

308 Cate Center 1
Room 336
Norman, OK 73019-2103
United States

Brent Norwood

University of Oklahoma - Department of Economics ( email )

729 Elm Avenue
Norman, OK 73019-2103
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
59
Abstract Views
589
rank
384,629
PlumX Metrics