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Cannabis and tobacco: substitutes and complements

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Mark N. Harris at Curtin University
Mark N. Harris
Ranjodh Singh at Curtin University
Ranjodh Singh
Preety Srivastava
Preety Srivastava
Preety Srivastava
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Using survey data from Australia, this paper examines whether the economic relationship, complements versus substitutes, between cannabis and tobacco varies over the life cycle. They are often consumed as a ‘bundle,’ but using a range of approaches, we find compelling evidence that these goods are complements at younger ages and change to substitutes at older ages. The importance of these findings is illustrated by considering the likely impacts of tobacco price changes on cannabis consumption rates over the age spectrum.
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Journal of Population Economics (2024) 37:75
https://doi.org/10.1007/s00148-024-01055-2
ORIGINAL PAPER
Cannabis and tobacco: substitutes and complements
Mark N. Harris1·Ranjodh B. Singh1·Preety Srivastava2
Received: 14 March 2023 / Accepted: 14 October 2024 / Published online: 6 November 2024
© The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature 2024
Abstract
Using survey data from Australia, this paper examines whether the economic relation-
ship, complements versus substitutes, between cannabis and tobacco varies over the
life cycle. They are often consumed as a ‘bundle,’ but using a range of approaches,
we find compelling evidence that these goods are complements at younger ages and
change to substitutes at older ages. The importance of these findings is illustrated by
considering the likely impacts of tobacco price changes on cannabis consumption rates
over the age spectrum.
Keywords Cannabis ·Tobacco ·Life-cycle effects ·Economic relationships
JEL Classification C5 ·D1 ·IE
1 Introduction and background
Cannabis is by far the most popular illicit drug consumed worldwide (see, for example,
Peacock et al. (2018); UNODC (2011)). We focus on Australia, where as of 2019, 43%
of Australians (aged 14 and over) had used an illicit drug at some point in their life, and
cannabis was the most commonly used such drug, with a prevalence of 11.6% (AIHW
2020). Chronic use of cannabis is associated with adverse physical and mental health
effects, such as lung cancer, chronic bronchitis and schizophrenia (WHO 2016). Other
than health effects, cannabis consumption is also associated with an array of adverse
consequences for the user, their family and the community at large, such as injuries
Responsible editor:XiChen
BRanjodh B. Singh
ranjodh.singh@curtin.edu.au
Mark N. Harris
mark.harris@curtin.edu.au
Preety Srivastava
pratima.srivastava@rmit.edu.au
1School of Accounting, Economics and Finance, Curtin University, Perth, WA, Australia
2School of Economics, Finance and Marketing, RMIT University, Melbourne, Victoria, Australia
123
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