Marijuana and Alcohol : The Effects of Marijuana Legalization on Alcohol Consumption in

As marijuana legalization begins to spread across the nation, policymakers and individuals are increasingly concerned with the consequences-positive and negative, intentional and unintentional. Currently, four states and the District of Columbia have legalized recreational marijuana programs, and twenty states already have recreational marijuana measures on the ballot for November 2016. One pressing question is how legalization will affect alcohol use. Consumption of each substance is considered a risky behavior, and many wonder how the legalization of one will impact consumption of the other. In this paper, we seek to understand if residents of Colorado and Washington treat marijuana and alcohol as economic substitutes or complements-if recreational marijuana legalization increases or decreases alcohol consumption. We use national health survey data and tax revenue data from these states, which began recreational marijuana programs in 2014. Our analysis shows that marijuana legalization is correlated with an increase in binge drinking, but a decrease in overall alcohol consumption. Overall, our results support the substitution hypothesis, but more time, and therefore data, is needed to fully understand the effects of the policy change.