Colorado received a particularly large economic boost because it was an early adopter of recreational marijuana legalization.
One important social benefit that isn't quantified is the social benefit arising from people not being incarcerated for and receiving criminal records for marijuana violations.
Another factor not considered is the social benefit arising from people who use marijuana without having substance abuse difficulties (and sometimes with medical benefits). Likewise, beneficial substitution of marijuana for alcohol is not analyzed.
There are lots of other methodological issues, and while a 35% increase in chronic homelessness seems high and could have confounding factors, the paper says that it is "just outside of statistical significance."
We analyze the effects of legalizing recreational marijuana on state economic and social outcomes (2000–20) using difference-in-differences estimation robust to staggered timing and heterogeneity of treatment.
We find moderate economic gains and accompanied by some social costs. Post-legalization, average state income grew by 3 percent, house prices by 6 percent, and population by 2 percent. However, substance use disorders, chronic homelessness, and arrests increased by 17, 35, and 13 percent, respectively.
Although some of our estimates are noisy, our findings suggest that the economic benefits of legalization are broadly distributed, while the social costs may be more concentrated among individuals who use marijuana heavily. States that legalized early experienced similar social costs but larger economic gains, implying a potential first-mover advantage.
Jason Brown, Elior Cohen, and R. Alison Felix, "Economic benefits and social costs legalizing recreational marijuana" Federal Reserve Bank of Kansas City Working Paper 23-10 (September 28, 2023).
2 comments:
Huh... I smoked weed a lot when young and not having the risk of legal issues would have been a real beni, however (from this study and common sense) it seems like the costs are concentrated on those least able to pay them. So privileged people get better off and the bottom 10% get screwed. Meet the new boss, same as the old boss...
@Guy
So the study says, although I think it is discounting the miseries of incarceration when illegal and of the black market trade.
I think that the homelessness issue is more correlation than causation.
People are homeless because housing costs have soared as new housing has been created more slowly than population growth. Prosperity has also favored liberal drug laws. But, it is not my experience that the homeless are ending up homeless to a significant degree because of marijuana legalization. The ranks of street vagrancy are not full of potheads who became potheads because of legalization. Notably, the statistical significance of the chronic homelessness number was marginal at best.
Also, the study doesn't say that the increased ranks of people with substance abuse are abusing marijuana and the notion of marijuana as a gateway drug are pretty much discredited.
It is a bad time to be in the bottom 10% or so. No doubt. But, to put that at the foot of marijuana legalization as a cause seems dubious at best.
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