Poster #41 - Estimating Price Elasticity of Cannabis Use among U.S. Adolescents: Evidence from States with Recreational Cannabis Commercialization

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Abstract

Purpose: The commercialization of recreational cannabis has led to increased concern over adolescent cannabis use in the U.S. Given that price-based regulations have the potential to reduce cannabis consumption and mitigate the adverse effects associated with cannabis use, this study aims to assess the price elasticity of cannabis use among U.S. adolescents.

Methods: Data were drawn from the repeated cross-sectional Monitoring the Future Survey conducted between 2015 and 2022. A total of 40,277 adolescents from ten states that had commercialized recreational cannabis at the time of survey were included in the analysis. Two cannabis use outcomes were assessed, including current cannabis use and frequent cannabis use. Logistic regressions were performed to estimate the associations of these outcomes with legal cannabis prices and cannabis taxes. To address potential endogeneity in prices, we applied the generalized method of moments estimator, using cannabis tax as an instrumental variable.

Results: An increase in cannabis prices was associated with a lower likelihood of current cannabis use, with estimated price elasticity ranging from -0.33 to -0.21 (p-values for most model specifications smaller than 0.05). The association between cannabis prices and frequent cannabis use was nonsignificant, nor were the associations of cannabis taxes with cannabis use and frequent use.

Discussion:  This study found no significant causal impact of legal cannabis prices on adolescent cannabis use. Rather, we identified a significantly negative association between legal cannabis prices and current cannabis use among adolescents. Further research utilizing long-term data is recommended.

Author

• Bing Han, University of California San Diego
  Presenting Author