Altered State? Assessing How Marijuana Legalization in California Could Influence Marijuana Consumption and Public Budgets
Jul 2, 2010
A central question in the debate regarding the legalization of marijuana in California is whether consumption would rise and by how much. This report reviews the economics literature which provides insights regarding how consumption might change and why. A key finding of the review is that the current state of the literature is limited, having not yet fully explored how average consumption among existing users will change in response to changes in price and legal risks. However, information regarding the prevalence of marijuana, both in terms of new users as well as regular users, is available. A review of this literature is considered in terms of the responsiveness of marijuana initiation, regular use and heavy use to changes in the price of marijuana, enforcement risk, decriminalization and other legal risks. From this review it is clear that total consumption will rise in response to legalization due to increases in the number of new users, increases in the number of regular and heavy users, and probable increases in the duration in which marijuana is consumed for average users.