Graduation Year
2021
Date of Submission
11-2020
Document Type
Campus Only Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Laura Grant
Terms of Use & License Information
OCLC Record Number
1241535232
Abstract
Marijuana is currently legal for recreational use in 11 states with 4 more voting to legalize it in the 2020 election; however, it remains illegal under federal law. Given marijuana’s unique status under the law, there are two markets for marijuana; the legal and illegal markets. Policy makers can directly influence the price of legal marijuana through tax policy, but there may also be indirect effects of tax policy in the illegal market. I study market behavior before and after a policy change in Washington State that raised the effective price of legal marijuana. I use daily sales of legal marijuana and marijuana seizure data to explore the impacts of the price change. I find that following the tax change, daily marijuana sales decreased while the size of marijuana seizures increased. These results indicate that following the tax change there was an increase in illegal behavior within the market for marijuana.
Recommended Citation
Brown, Henry, "The Market for Marijuana: Implications of a Tax Change in Washington State" (2021). CMC Senior Theses. 2554.
https://scholarship.claremont.edu/cmc_theses/2554
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.
