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Do Higher Cigarette
Prices Encourage Youth to Use Marijuana? National
Bureau of Economic Research, Inc. Every major national tobacco
legislation proposed in the past two years has called for significant
increases in the price of cigarettes as a way to discourage youths from
smoking. One argument used to oppose these bills is that increases in
the price of cigarettes would cause youths to substitute marijuana for
cigarettes. Although it has long been believed that cigarettes are a gateway
drug,' no economic research has been done to determine whether cigarettes
and marijuana are economic complements or substitutes. This paper begins
to fill the void in the current research by examining the contemporaneous
relationship between the demands for cigarettes and marijuana among a
nationally representative sample of 8th, 10th and 12th graders from the
1992-1994 Monitoring the Future Project. Two part models are used to estimate
reduced form demand equations. Examination of the cross-price effects
clearly shows that higher cigarette prices will not increase marijuana
use among youths. In addition to reducing youth smoking, we find that
higher cigarette prices significantly reduce the average level of marijuana
used by current users. Cigarette prices also have a negative effect on
the probability of using marijuana findings are not significant at conventional
levels.
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