Marijuana Legalization and Household Spending on Food and Alcohol
19 Pages Posted: 12 Nov 2020
Date Written: September 22, 2020
Utilizing the Consumer Expenditure Interview Survey from 2005 to 2018, I study spending on food and alcohol following recreational marijuana legalization (RML). Exploiting differences in the timing of the passage of RMLs and employing differences-in-differences methods, I find that households located in RML states increase their quarterly spending on food by $67.69, which is driven mainly by spending on food consumed away from home. Legalization of recreational marijuana also leads to increased quarterly spending on alcohol by $11.23. These findings suggest a complementarity between food, alcohol, and marijuana.
Keywords: Recreational Marijuana Laws, Food, Alcohol
JEL Classification: I1
Suggested Citation: Suggested Citation