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by Rosalie L. Pacula, Michael Grossman, Frank J. Chaloupka, Patrick M. O'Malley, Lloyd D. Johnston, and Mathew C. Farrelly ABSTRACT 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 range 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 though 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.
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