What America's Users Spend on Illegal Drugs: 2000&amp;ndash;2010

Kilmer, Beau; Everingham, Susan M. Sohler; Caulkins, Jonathan P.; Midgette, Gregory; Pacula, Rosalie Liccardo; Reuter, Peter; Burns, Rachel M.; Han, Bing; Lundberg, Russell

doi:10.7249/rr534

Cited by 70 publications

(56 citation statements)

References 72 publications

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“…By comparison, national estimates of average THC level for cannabis seized during prohibition did not exceed 5% in the US until 2001 [48], and as recently as 2010 typically ranged from 8% to 13% [41, 42]. Potency in Washington State also generally exceeds the 15% limit for cannabis products that has been discussed in the Netherlands [49].…”

Section: Discussionmentioning

confidence: 99%

Variation in cannabis potency and prices in a newly legal market: evidence from 30 million cannabis sales in Washington state

et al. 2017

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Aims To (1) assess trends and variation in the market share of product types and potency sold in a legal cannabis retail market, and (2) estimate how potency and purchase quantity influence price variation for cannabis flower. Design Secondary analysis of publicly available data from Washington State’s cannabis traceability system spanning July 7, 2014 to September 30, 2016. Descriptive statistics and linear regressions assessed variation and trends in cannabis product variety and potency. Hedonic regressions estimated how purchase quantity and potency influence cannabis flower price variation. Setting Washington State, USA. Participants (1) 44,482,176 million cannabis purchases, including (2) 31,052,123 cannabis flower purchases after trimming price and quantity outliers. Measurements Primary outcome measures were (1) monthly expenditures on cannabis, total delta-9-tetrahydrocannabinol (THC) concentration, and cannabidiol (CBD) concentration by product type; and (2) excise-tax-inclusive price per gram of cannabis flower. Key covariates for the hedonic price regressions included quantity purchased, THC, and CBD. Findings Traditional cannabis flowers still account for the majority of spending (66.6%), but the market share of extracts for inhalation increased by 145.8% between October 2014 and September 2016, now composing 21.2% of sales. The average THC-level for cannabis extracts is more than triple that for cannabis flowers (68.7% compared to 20.6%). For flower products, there is a statistically significant relationship between price per gram and both THC [coefficient = 0.012; 95% confidence interval (CI) = 0.011 to 0.013] and CBD [coefficient = 0.017; CI = 0.015 to 0.019]. The estimated discount elasticity is −0.06 [CI = −0.07 to −0.05]. Conclusions In the state of Washington, USA, the legal cannabis market is currently dominated by high-THC cannabis flower, and features growing expenditures on extracts. For cannabis flower, both THC and CBD are associated with higher per-gram prices, and there are small but significant quantity discounts.

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Section: Discussionmentioning

confidence: 99%

Variation in cannabis potency and prices in a newly legal market: evidence from 30 million cannabis sales in Washington state

et al. 2017

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“…In particular, like alcohol, the casual user or marijuana represents a relatively large share of the proportion of people who report using any marijuana in the past year, but they represent a very small proportion of the total amount consumed. 1-5 This realization implies that knowledge of how prevalence rates change in response to a change in price may not be that useful for understanding how total consumption would change with a change in price because of the heterogeneity in users represented by any particular prevalence rate. To understand how total consumption (in terms of volume of the good consumed) changes, one needs to understand how behavior among regular users and heavy users changes.…”

Section: Recommendationsmentioning

confidence: 99%

“…Marijuana markets, like markets for other goods, are characterized by a number of different types of consumers, all of whom contribute in varying amounts to the total amount consumed in the market 1-3 and researchers have been careful to consider the type of user in constructing estimates of use. 4,5 Yet, reviews of the literature on the price sensitivity of demand often ignore these important differences.…”

Section: Introductionmentioning

confidence: 99%

“…Although new initiates and casual users represent a large proportion of the total number of users, they represent a very small amount of the total quantity of the drug consumed. 1,3,5 Estimates of a price decrease of more than 80 percent 6,7 would have very different implications for light users, who spend a very small share of their income on marijuana, than on more regular or heavy users, who spend more of their disposable income on the good.…”

Section: Introductionmentioning

confidence: 99%

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Why Changes in Price Matter When Thinking About Marijuana Policy: A Review of the Literature on the Elasticity of Demand

Pacula

Lundberg

2013

Public Health Rev

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Recent debates regarding liberalization of marijuana policies often rest on assumptions regarding the extent to which such policy changes would lead to a change in marijuana consumption and by whom. This paper reviews the economics literature assessing the responsiveness of consumption to changes in price and enforcement risk and explicitly considers how this responsiveness varies by different user groups. In doing so, it demonstrates how most of the research has examined responsiveness to prevalence of use, which is a composite of different user groups, rather than level of consumption among regular or heavy users, which represent the largest share of total quantities consumed. Thus, it is not possible to generate reliable estimates of the impact of liberalizing policies on either tax revenues or harms, as these outcomes are most directly influenced by the amounts consumed by regular or heavy users, not prevalence rates.

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“…Heroin prices have fallen, in particular: by some measures, inflation-adjusted (2010 dollars) typical prices of one pure gram of heroin fell from over $1500 in the early 1980s, to $400 in the early 2000s, and have continued to gradually fall since then (ONDCP 2004; ONDCP 2012; Kilmer et al, 2014). In contrast, one goal of many policy responses to drug abuse problems is to increase the price.…”

Section: Introductionmentioning

confidence: 99%

The price elasticity of demand for heroin: Matched longitudinal and experimental evidence

Olmstead

Alessi

Kline

et al. 2015

Journal of Health Economics

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This paper reports estimates of the price elasticity of demand for heroin based on a newly constructed dataset. The dataset has two matched components concerning the same sample of regular heroin users: longitudinal information about real-world heroin demand (actual price and actual quantity at daily intervals for each heroin user in the sample) and experimental information about laboratory heroin demand (elicited by presenting the same heroin users with scenarios in a laboratory setting). Two empirical strategies are used to estimate the price elasticity of demand for heroin. The first strategy exploits the idiosyncratic variation in the price experienced by a heroin user over time that occurs in markets for illegal drugs. The second strategy exploits the experimentally-induced variation in price experienced by a heroin user across experimental scenarios. Both empirical strategies result in the estimate that the conditional price elasticity of demand for heroin is approximately −0.80.

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What America's Users Spend on Illegal Drugs: 2000–2010

Cited by 70 publications

References 72 publications

Variation in cannabis potency and prices in a newly legal market: evidence from 30 million cannabis sales in Washington state

Variation in cannabis potency and prices in a newly legal market: evidence from 30 million cannabis sales in Washington state

Why Changes in Price Matter When Thinking About Marijuana Policy: A Review of the Literature on the Elasticity of Demand

The price elasticity of demand for heroin: Matched longitudinal and experimental evidence

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