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Pacula RL,
Grossmna M, Chaloupka FJ, O'Malley PM, Johnston LD, and
Farrelly MC. This paper
contains the first estimates of the price sensitivity of the
prevalence of youth marijuana use. Survey data on marijuana
use by high school seniors from the Monitoring the Future
Project are combined with data on marijuana prices and
potency from the Drug Enforcement Administration Office of
Intelligence or Intelligence Division. Our estimates of the
price elasticity of annual marijuana participation range
from -0.06 to -0.47, while those for thirty day
participation from -0.002 to -0.69. These estimates clearly
imply that changes in the real, quality adjusted price of
marijuana contributed significantly to the trends in youth
marijuana use between 1982 and 1998, particularly during the
contraction in use from 1982 to 1992. Similarly, changes in
youth perceptions of the harms associated with regular
marijuana use had a substantial impact on both the
contraction in use during the 1982 through 1992 period and
the subsequent expansion in use after 1992. These findings
underscore the usefulness of considering price in addition
to more traditional determinants in any analysis of
marijuana consumption decisions made by youths. |