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The Pot Rush: Is Legalized Marijuana a Positive Local Amenity?
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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. JEL Classification: I18, R23, K42, C22
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To date, 16 states have passed medical marijuana laws, yet very little is known about their effects. Using state-level data, we examine the relationship between medical marijuana laws and a variety of outcomes. Legalization of medical marijuana is associated with increased use of marijuana among adults, but not among minors. In addition, legalization is associated with a nearly 9 percent decrease in traffic fatalities, most likely to due to its impact on alcohol consumption. Our estimates provide strong evidence that marijuana and alcohol are substitutes.
We extend the inference procedure for the synthetic control method in two ways. First, we propose parametric weights for the p-value that includes the equal weights benchmark of Abadie et al. [1]. By changing the value of this parameter, we can analyze the sensitivity of the test’s result to deviations from the equal weights benchmark. Second, we modify the RMSPE statistic to test any sharp null hypothesis , including, as a specific case, the null hypothesis of no effect whatsoever analyzed by Abadie et al. [1]. Based on this last extension, we invert the test statistic to estimate confidence sets that quickly show the point-estimates’ precision, and the test’s significance and robustness. We also extend these two tools to other test statistics and to problems with multiple outcome variables or multiple treated units. Furthermore, in a Monte Carlo experiment, we find that the RMSPE statistic has good properties with respect to size, power and robustness. Finally, we illustrate the usefulness of our proposed tools by reanalyzing the economic impact of ETA’s terrorism in the Basque Country, studied first by Abadie and Gardeazabal [2] and Abadie et al. [3].
Marijuana is the most common illicit drug with vocal advocates for legalization. Among other things, legalization would increase access and remove the stigma of illegality. Our model disentangles the role of access from preferences and shows that selection into access is not random. We find that traditional demand estimates are biased resulting in incorrect policy conclusions. If marijuana were legalized, those under 30 would see modest increases in use of 28 percent, while on average use would increase by 48 percent (to 19.4 percent). Tax policies are effective at curbing use, where Australia could raise AU$1 billion (and the United States US$12 billion).
In 2014, Colorado began allowing sales of recreational marijuana. With no state models or national guidance to follow, public health officials are seeking lessons from medical marijuana to prepare for public health implications of more widely available legal marijuana.
Researchers at the Agency for Healthcare Research and Quality (AHRQ) have examined the impact of different kinds of State laws in a number of previous studies. This study examines the impact of State legislation that caps damage awards in malpractice cases on decisions of physicians about where to practice medicine. Twenty-four States now have laws that limit damage payments in malpractice cases. Most of these laws limit the amounts paid for noneconomic damages (e.g., pain and suffering) but a few limit both economic (e.g., medical expenses and lost wages) and noneconomic damages. There is currently a national debate on the desirability of extending caps on malpractice damage awards to all States, and President Bush recently introduced a proposal to cap payments for noneconomic damages in medical malpractice cases at $250,000. Supporters of legislation to cap damages in malpractice cases maintain that it reduces malpractice premiums and helps insure an adequate supply of physicians. They also assert that escalating, multi-million-dollar jury awards are driving malpractice premium increases and that capping damage awards for pain and suffering helps restrain the rate of
In recent years a widespread consensus has emerged about the necessity of establishing bridges between the quantitative and the qualitative approaches to empirical research in political science. In this article, we discuss the use of the synthetic control method (Abadie and Gardeazabal, 2003; Abadie, Diamond, and Hainmueller, 2010) as a way to bridge the quantitative/qualitative divide in comparative politics. The synthetic control method provides a systematic way to choose comparison units in comparative case studies. This systematization opens the door to precise quantitative inference in small-sample comparative studies, without precluding the application of qualitative approaches. That is, the synthetic control method allows researchers to put "qualitative flesh on quantitative bones"' (Tarrow, 1995). We illustrate the main ideas behind the synthetic control method with an application where we study the economic impact of the 1990 German reunification in West Germany.
Using state-level data for the period 1990 through 2007, we estimate the effect of legalizing medical marijuana on suicide rates. Our results suggest that the passage of a medical marijuana law is associated with an almost 5 percent reduction in the total suicide rate, an 11 percent reduction in the suicide rate of 20- through 29-year-old males, and a 9 percent reduction in the suicide rate of 30- through 39-year-old males. Estimates of the relationship between legalization and female suicides are less precise and are sensitive to functional form.
We test for an effect of Arizona's 2007 Legal Arizona Workers Act (LAWA) on the proportion of the state population characterized as foreign-born, as non-citizen, and as non-citizen Hispanic. We use the synthetic control method to select a group of states against which the population trends of Arizona can be compared. We document a notable and statistically significant reduction in the proportion of the Arizona population that is foreign-born and in particular, that is Hispanic noncitizen. The decline observed for Arizona matches the timing of LAWA's implementation, deviates from the time series for the chosen synthetic control group, and stands out relative to the distribution of placebo estimates for the remainder of states in the nation. Furthermore, we do not observe similar declines for Hispanic naturalized citizens, a group not targeted by the legislation. Our results on LAWA's impact on the housing market provide further support for our findings.
The R package Synth implements synthetic control methods for comparative case studies designed to estimate the causal e ects of policy interventions and other events of interest (Abadie and Gardeazabal 2003; Abadie, Diamond, and Hainmueller 2010). These techniques are particularly well-suited to investigate events occurring at an aggregate level (i.e., countries, cities, regions, etc.) and a ffecting a relatively small number of units.
Bene ts and features of the Synth package are illustrated using data from Abadie and
Gardeazabal (2003), which examined the economic impact of the terrorist conflict in the Basque Country.
Building on an idea in Abadie and Gardeazabal (2003), this article investigates the application of synthetic control methods to comparative case studies. We discuss the advantages of these methods and apply them to study the effects of Proposition 99, a large-scale tobacco control program that California implemented in 1988. We demonstrate that following Proposition 99 tobacco consumption fell markedly in California relative to a comparable synthetic control region. We estimate that by the year 2000 annual per-capita cigarette sales in California were about 26 packs lower than what they would have been in the absence of Proposition 99. Given that many policy interventions and events of interest in social sciences take place at an aggregate level (countries, regions, cities, etc.) and affect a small number of aggregate units, the potential applicability of synthetic control methods to comparative case studies is very large, especially in situations where traditional regression methods are not appropriate. The methods proposed in this article produce informative inference regardless of the number of available comparison units, the number of available time periods, and whether the data are individual (micro) or aggregate (macro). Software to compute the estimators proposed in this article is available at the authors' web-pages.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
An association between use of cannabis in adolescence and subsequent risk of schizophrenia was previously reported in a follow up of Swedish conscripts. Arguments were raised that this association may be due to use of drugs other than cannabis and that personality traits may have confounded results. We performed a further analysis of this cohort to address these uncertainties while extending the follow up period to identify additional cases.
Historical cohort study.
1969-70 survey of Swedish conscripts (>97% of the country's male population aged 18-20).
50 087 subjects: data were available on self reported use of cannabis and other drugs, and on several social and psychological characteristics.
Admissions to hospital for ICD-8/9 schizophrenia and other psychoses, as determined by record linkage.
Cannabis was associated with an increased risk of developing schizophrenia in a dose dependent fashion both for subjects who had ever used cannabis (adjusted odds ratio for linear trend of increasing frequency 1.2, 95% confidence interval 1.1 to 1.4, P<0.001), and for subjects who had used only cannabis and no other drugs (adjusted odds ratio for linear trend 1.3, 1.1 to 1.5, P<0.015). The adjusted odds ratio for using cannabis >50 times was 6.7 (2.1 to 21.7) in the cannabis only group. Similar results were obtained when analysis was restricted to subjects developing schizophrenia after five years after conscription, to exclude prodromal cases.
Cannabis use is associated with an increased risk of developing schizophrenia, consistent with a causal relation. This association is not explained by use of other psychoactive drugs or personality traits relating to social integration.
To investigate the relation between cannabis use and psychotic symptoms in individuals with above average predisposition for psychosis who first used cannabis during adolescence.
Analysis of prospective data from a population based sample. Assessment of substance use, predisposition for psychosis, and psychotic symptoms was based on standardised personal interviews at baseline and at follow up four years later.
2437 young people (aged 14 to 24 years) with and without predisposition for psychosis.
Psychotic symptoms at follow up as a function of cannabis use and predisposition for psychosis at baseline.
After adjustment for age, sex, socioeconomic status, urbanicity, childhood trauma, predisposition for psychosis at baseline, and use of other drugs, tobacco, and alcohol, cannabis use at baseline increased the cumulative incidence of psychotic symptoms at follow up four years later (adjusted odds ratio 1.67, 95% confidence interval 1.13 to 2.46). The effect of cannabis use was much stronger in those with any predisposition for psychosis at baseline (23.8% adjusted difference in risk, 95% confidence interval 7.9 to 39.7, P = 0.003) than in those without (5.6%, 0.4 to 10.8, P = 0.033). The risk difference in the "predisposition" group was significantly greater than the risk difference in the "no predisposition" group (test for interaction 18.2%, 1.6 to 34.8, P = 0.032). There was a dose-response relation with increasing frequency of cannabis use. Predisposition for psychosis at baseline did not significantly predict cannabis use four years later (adjusted odds ratio 1.42, 95% confidence interval 0.88 to 2.31).
Cannabis use moderately increases the risk of psychotic symptoms in young people but has a much stronger effect in those with evidence of predisposition for psychosis.
We develop a neoclassical general‐equilibrium model to explain cross‐metro variation in population and density. We provide new methods to estimate traded and non‐traded productivities, and elasticities of housing and land supply, using density and land area data. From wage and housing cost indices, the model explains half of U.S. density and population variation and finds that quality of life determines location choices more than trade productivity; productivity and factor substitution in housing matter most, but are weak in nicer areas. Relaxing land use regulations would increase population in the West, raising both quality of life and productivity experienced by residents. This article is protected by copyright. All rights reserved
Importance:
Historical shifts are occurring in marijuana policy. The effect of legalizing marijuana for recreational use on rates of adolescent marijuana use is a topic of considerable debate.
Objective:
To examine the association between the legalization of recreational marijuana use in Washington and Colorado in 2012 and the subsequent perceived harmfulness and use of marijuana by adolescents.
Design, setting, and participants:
We used data of 253 902 students in eighth, 10th, and 12th grades from 2010 to 2015 from Monitoring the Future, a national, annual, cross-sectional survey of students in secondary schools in the contiguous United States. Difference-in-difference estimates compared changes in perceived harmfulness of marijuana use and in past-month marijuana use in Washington and Colorado prior to recreational marijuana legalization (2010-2012) with postlegalization (2013-2015) vs the contemporaneous trends in other states that did not legalize recreational marijuana use in this period.
Main outcomes and measures:
Perceived harmfulness of marijuana use (great or moderate risk to health from smoking marijuana occasionally) and marijuana use (past 30 days).
Results:
Of the 253 902 participants, 120 590 of 245 065(49.2%) were male, and the mean (SD) age was 15.6 (1.7) years. In Washington, perceived harmfulness declined 14.2% and 16.1% among eighth and 10th graders, respectively, while marijuana use increased 2.0% and 4.1% from 2010-2012 to 2013-2015. In contrast, among states that did not legalize recreational marijuana use, perceived harmfulness decreased by 4.9% and 7.2% among eighth and 10th graders, respectively, and marijuana use decreased by 1.3% and 0.9% over the same period. Difference-in-difference estimates comparing Washington vs states that did not legalize recreational drug use indicated that these differences were significant for perceived harmfulness (eighth graders: % [SD], -9.3 [3.5]; P = .01; 10th graders: % [SD], -9.0 [3.8]; P = .02) and marijuana use (eighth graders: % [SD], 5.0 [1.9]; P = .03; 10th graders: % [SD], 3.2 [1.5]; P = .007). No significant differences were found in perceived harmfulness or marijuana use among 12th graders in Washington or for any of the 3 grades in Colorado.
Conclusions and relevance:
Among eighth and 10th graders in Washington, perceived harmfulness of marijuana use decreased and marijuana use increased following legalization of recreational marijuana use. In contrast, Colorado did not exhibit any differential change in perceived harmfulness or past-month adolescent marijuana use following legalization. A cautious interpretation of the findings suggests investment in evidence-based adolescent substance use prevention programs in any additional states that may legalize recreational marijuana use.
A growing number of U.S. states have adopted “millionaire taxes” on top income-earners. This increases the progressivity of state tax systems, but it raises concerns about tax flight: elites migrating from high-tax to low-tax states, draining state revenues, and undermining redistributive social policies. Are top income-earners “transitory millionaires” searching for lower-tax places to live? Or are they “embedded elites” who are reluctant to migrate away from places where they have been highly successful? This question is central to understanding the social consequences of progressive taxation. We draw on administrative tax returns for all million-dollar income-earners in the United States over 13 years, tracking the states from which millionaires file their taxes. Our dataset contains 45 million tax records and provides census-scale panel data on top income-earners. We advance two core analyses: (1) state-to-state migration of millionaires over the long-term, and (2) a sharply-focused discontinuity analysis of millionaire population along state borders. We find that millionaire tax flight is occurring, but only at the margins of statistical and socioeconomic significance.
We present a hedonic framework to estimate U.S. households' preferences over local climates, using detailed weather and 2000 Census data. We find that Americans favor an average daily temperature of 65 degrees Fahrenheit, will pay more on the margin to avoid excess heat than cold, and are not substantially more averse to extremes than to temperatures that are merely uncomfortable. These preferences vary by location due to sorting or adaptation. Changes in climate amenities under business-as-usual predictions imply annual welfare losses of 1 to 3 percent of income by 2100, holding technology and preferences constant.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
The issue before Congress is whether to continue the federal prosecution of medical marijuana patients and their providers, in accordance with the federal Controlled Substances Act (CSA), or whether to relax federal marijuana prohibition enough to permit the medicinal use of botanical cannabis products when recommended by a physician, especially where permitted under state law. Fourteen states, mostly in the West, have enacted laws allowing the use of marijuana for medical purposes, and many thousands of patients are seeking relief from a variety of serious illnesses by smoking marijuana or using other herbal cannabis preparations. Two bills relating to the therapeutic use of cannabis have been introduced in the 111th Congress. The Medical Marijuana Patient Protection Act (H.R. 2835), which would allow the medical use of marijuana in states that permit its use with a doctor's recommendation, was introduced on June 11, 2009, by Representative Barney Frank. The bill would move marijuana from Schedule I to Schedule II of the CSA and exempt from federal prosecution authorized patients and medical marijuana providers who are acting in accordance with state laws. Also, the Truth in Trials Act (H.R. 3939), a bill that would make it possible for defendants in federal court to reveal to juries that their marijuana activity was medically related and legal under state law, was introduced on October 27, 2009, by Representative Sam Farr. For the first time since District of Columbia residents approved a medical marijuana ballot initiative in 1998, a rider blocking implementation of the initiative was not attached to the D.C. appropriations act for FY2010 (P.L. 111-117), clearing the way for the creation of a medical marijuana program for seriously ill patients in the nation's capital. The Obama Administration Department of Justice, in October 2009, announced an end to federal raids by the Drug Enforcement Administration of medical marijuana dispensaries that are operating in "clear and unambiguous compliance with existing state laws." This move fulfills a pledge to end such raids that was made by candidate Obama during the presidential campaign. Claims and counterclaims about medical marijuana-much debated by journalists and academics, policymakers at all levels of government, and interested citizens-include the following: Marijuana is harmful and has no medical value; marijuana effectively treats the symptoms of certain diseases; smoking is an improper route of drug administration; marijuana should be rescheduled to permit medical use; state medical marijuana laws send the wrong message and lead to increased illicit drug use; the medical marijuana movement undermines the war on drugs; patients should not be arrested for using medical marijuana; the federal government should allow the states to experiment and should not interfere with state medical marijuana programs; medical marijuana laws harm the federal drug approval process; the medical cannabis movement is a cynical ploy to legalize marijuana and other drugs. With strong opinions being expressed on all sides of this complex issue, the debate over medical marijuana does not appear to be approaching resolution. This report will be updated as legislative activity and other developments occur.
This paper delves into the factors which determine the attractiveness of regions in Europe for migrants. Contrary to the literature on the US which has increasingly focused on the role of amenities, existing research in Europe tends to highlight the predominance of economic conditions as the main drivers of migration. Differentiating between economic, socio-demographic and amenity-related territorial features, we examine the appeal of various regional characteristics for migrants by analyzing net migration data for 133 European regions between 1990 and 2006. Our results show that, in addition to economic, human capital-related and demographic aspects, network effects and in contrast to existing literature different types of regional amenities exert an important influence on the relative attractiveness of sub-national territories across the European Union (EU). Our findings therefore indicate that locational choices in Europe may be much more similar to place-based preferences in the US than originally thought.
One approach to urban areas emphasizes the existence of certain immutable relationships, such as Zipf's or Gibrat's Law. An alternative view is that urban change reflects individual responses to changing tastes or technologies. This paper examines almost 200 years of regional change in the U.S. and finds that few, if any, growth relationships remain constant, including Gibrat's Law. Education does a reasonable job of explaining urban resilience in recent decades, but does not seem to predict county growth a century ago. After reviewing this evidence, we present and estimate a simple model of regional change, where education increases the level of entrepreneurship. Human capital spillovers occur at the city level because skilled workers produce more product varieties and thereby increase labor demand. We find that skills are associated with growth in productivity or entrepreneurship, not with growth in quality of life, at least outside of the West. We also find that skills seem to have depressed housing supply growth in the West, but not in other regions, which supports the view that educated residents in that region have fought for tougher land-use controls. We also present evidence that skills have had a disproportionately large impact on unemployment during the current recession.
This paper examines the history of internal migration in the United States since the 1980s. By most measures, internal migration in the United States is at a 30-year low. The widespread decline in migration rates across a large number of subpopulations suggests that broad-based economic forces are likely responsible for the decrease. An obvious question is the extent to which the recent housing market contraction and the recession may have caused this downward trend in migration: after all, relocation activity often involves both housing market activity and changes in employment. However, we find relatively small roles for both of these cyclical factors. While we will suggest a few other possible explanations for the recent decrease in migration, the puzzle remains. Finally, we compare U.S. migration to other developed countries. Despite the steady decline in U.S. migration, the commonly held belief that Americans are more mobile than their European counterparts still appears to hold true.
Is there a local economic impact of immigration? Immigration pushes up rents and housing values in US destination cities. The positive association of rent growth and immigrant inflows is pervasive in time series for all metropolitan areas. I use instrumental variables based on a “shift-share” of national levels of immigration into metropolitan areas. An immigration inflow equal to 1% of a city's population is associated with increases in average rents and housing values of about 1%. The results suggest an economic impact that is an order of magnitude bigger than that found in labor markets.
This study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities. The theory demonstrates that if the amenity is also productive, then the sign of the wage gradient is unclear while the rent gradient is positive. The theory is extended to include the housing market and nontraded goods. These extensions require little modification of the conclusion. The empirical work on wages shows that the regional wage differences can be explained largely by these local attributes. With the use of site price data, implicit prices are estimated and quality of life rankings for the cities are computed.
This paper analyzes the impact of increases in the minimum drinking age on the prevalence of alcohol and marijuana use among high school seniors. The empirical analysis is based on a large sample of students from 43 states over the years 1980-1989. We find that increases in the legal minimum drinking age did slightly reduce the prevalence of alcohol consumption. We also find, however, that increased legal minimum drinking ages had the unintended consequence of slightly increasing the prevalence of marijuana consumption. Estimates from a structural model suggest that this unintended consequence is attributable to standard substitution effects.
This paper investigates the economic effects of conflict, using the terrorist conflict in the Basque Country as a case study. Our analysis rests on two different strategies. First, we use a combination of other regions to construct a ``synthetic'' control region which resembles many relevant economic characteristics of the Basque Country before the outset of political terrorism in the 1970's. The subsequent economic evolution of this ``counterfactual'' Basque Country without terrorism is compared to the actual experience of the Basque Country. We find that, after the outbreak of terrorism, per capita GDP in the Basque Country declined about 10 percent points relative to the synthetic control region. Moreover, this gap seemed to widen in response to spikes in terrorist activity. The second part of this study uses the truce declared in September 1998 as a natural experiment to estimate the effects of the conflict. If the terrorist conflict was perceived to have a negative impact on the Basque economy, stocks of firms with a significant part of their business in the Basque Country should have shown a positive relative performance as the truce became credible, and a negative relative performance at the end of the cease-fire. We find evidence that is consistent with this conjecture using event study methods.
Marijuana legalization could inject over $130 billion into US tax coffers by 2025 -if the Trump administration stays hands-off
Business Insider. (2018). Marijuana legalization could inject over $130 billion into US tax
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2018 at http://www.businessinsider.com/cannabis-to-add-a-million-jobs-132-billion-taxrevenue-to-us-by-2025-2018-1?IR=T. Accessed 25 February 2018.
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About six-in-ten Americans support marijuana legalization
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