Decriminalization and Marijuana Smoking Prevalence: Evidence from Australia

This paper uses the 2001 wave of National Drug Strategy Household Survey (NDSHS) to assess the impact of marijuana decriminalization policy on marijuana smoking prevalence in Australia. Both parametric and non-parametric methods are used. The parametric approach postulates an endogenous probit switching model and its nested binary probit, endogenous bivariate probit and two-part models to estimate this impact. The non-parametric approach uses the propensity score stratification matching to compute alternative measures of treatment effect. Specification analysis is conducted and it appears that our sample size is not large enough to perform a reliable non-parametric estimation. It also shows that the endogenous probit switching model, which takes into account selection on observables and selection on unobservables, can provide some useful information on the average treatment effect of decriminalization as well as the effects of other socio-demographic factors on marijuana use. The parametric approach suggests that decriminalization raises the probability of smoking marijuana by 16.3%. JEL Classification: I12, I18