Marijuana Prices and Use

Changes in the price of marijuana contributed significantly to the trends in marijuana use between 1982 and 1998, especially to the reduction in usage that occurred from 1982 to 1992.

Marijuana is the illicit drug most commonly used by adolescents, and it has been for at least 25 years. Research shows a significant correlation between marijuana use and poor school grades, as well as between marijuana use and dropping out of school.

In Marijuana and Youth (NBER Working Paper No. 7703), authors Rosalie Pacula, Michael Grossman, Frank Chaloupka, Patrick O'Malley, Lloyd Johnston, and Matthew Farrelly ask whether price influences the demand for marijuana among youth, and how the drug's perceived harm may affect adolescents' use of the substance. They find that changes in the price of marijuana contributed significantly to the trends in marijuana use between 1982 and 1998, especially to the reduction in usage that occurred from 1982 to 1992. Similarly, youths' perceptions of the potential harmful effects of marijuana use had a substantial impact on both the reduction in use from 1982 to 1992 and the subsequent increased use after 1992.

Using data from the Monitoring the Future surveys, the authors look at thirty-day, annual, and lifetime marijuana use among nationally representative samples of American high school seniors. From 1981 to 1992, marijuana use among high school seniors declined to a recorded low of 12 percent in the previous thirty days, 22 percent in the previous year, and 33 percent reporting use at any point in their life. After 1992, the trend reversed itself, and by 1998 seniors reported increased usage rates of 23 percent, 38 percent, and 49 percent respectively. The increase was consistent among both genders and all ethnic groups.

The behavior of price during the time periods from 1982-92 and after 1992 reflect the adolescent usage. In the earlier period, the price of marijuana more than tripled, while potency fell by 22 percent. Since 1992, price has fallen by 16 percent and potency has increased by 53 percent. During those same periods, adolescent marijuana use also seems to have been influenced by perceptions of the harm that marijuana may cause. These perceptions correlate, in part, with the rise and fall of media campaigns designed to illustrate to youth the potential harm of marijuana use. The authors conclude that it is useful to consider price, in addition to more traditional determinants, in any analysis of marijuana use by youths.

-- Lester A. Picker