NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Risks and Prices: The Role of User Sanctions in Marijuana Markets

Rosalie Liccardo Pacula, Beau Kilmer, Michael Grossman, Frank J. Chaloupka

NBER Working Paper No. 13415
Issued in September 2007
NBER Program(s):   HE

User sanctions influence the legal risk for participants in illegal drug markets. A change in user sanctions may change retail drug prices, depending on how it changes the legal risk to users, how it changes the legal risk to dealers, and the slope of the supply curve. Using a novel dataset with rich transaction-level information, this paper evaluates the impact of recent changes in user sanctions for marijuana on marijuana prices. The results suggest that lower legal risks for users are associated with higher marijuana prices in the short-run, which ceteris paribus, implies higher profits for drug dealers. Additionally, the findings have important implications for thinking about the slope of the supply curve and interpreting previous research on the effect of drug laws on demand for marijuana.

download in pdf format
   (152 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (152 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13415

Published: Rosalie Liccardo Pacula & Beau Kilmer & Michael Grossman & Frank J. Chaloupka, 2010. "Risks and Prices: The Role of User Sanctions in Marijuana Markets," The B.E. Journal of Economic Analysis & Policy, Berkeley Electronic Press, vol. 10(1). citation courtesy of

Users who downloaded this paper also downloaded these:
Pacula, Powell, Heaton, and Sevigny w19302 Assessing the Effects of Medical Marijuana Laws on Marijuana and Alcohol Use: The Devil is in the Details
Donohue, Ewing, and Peloquin w16776 Rethinking America's Illegal Drug Policy
Pacula and Kilmer w10046 Marijuana and Crime: Is there a Connection Beyond Prohibition?
Farrelly, Bray, Zarkin, Wendling, and Pacula w6940 The Effects of Prices and Policies on the Demand for Marijuana: Evidence from the National Household Surveys on Drug Abuse
Pacula, Chriqui, and King w9690 Marijuana Decriminalization: What does it mean in the United States?
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us