DP4991 Cannabis Prices and Dynamics of Cannabis Use

Author(s): Jan C. van Ours, Jenny Williams
Publication Date: April 2005
Keyword(s): age of initiation, cannabis prices, cannabis use
JEL(s): C41, D12, I19
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4991

This paper uses duration models and self-reported cannabis histories from young Australians to study the dynamics of cannabis use. We find that low cannabis prices are associated with early initiation into cannabis use. While the decision to quit does not appear to be directly influenced by price, we find that the younger an individual is when they start using cannabis the less likely they are to quit. Therefore, low cannabis prices lead to early use and because of that they lead to a low quit rate and hence a longer duration of use.