Drug study: price is more effective than punishment

November 12, 2000

New research at Adelaide University in Australia has found that the cost of marijuana -- not the legal punishment for marijuana offences -- is the real key to reducing the amount of the drug used.

Adelaide University economist Dr Jenny Williams conducted a major study of Australians' participation in cannabis use and the frequency of usage, as well as the impact of cost and criminal justice policies.

Dr Williams, who is due to present her findings at this week's conference of the Southern Economic Association in Washington, DC, believes the Australian experience may also hold answers for other countries.

While her study found that criminal justice measures, such as fines and prison sentences, deter some people from using marijuana, such measures have very little impact on the frequency and amount of marijuana used by those who choose to do so.

The study also found that an increase in the price of high-quality cannabis from A$32 to A$38 per gram would reduce the overall proportion of users by 16%, and the proportion of weekly users by 23%.

In contrast, increasing the length of prison sentence for possession of a gram of cannabis from 1 to 2 years would reduce the proportion of cannabis users by only 3%, and reduce the proportion of weekly users by only 2%.

"There is strong evidence to show that marijuana demand is price responsive, therefore price is likely to be a more effective instrument for reducing the demand for marijuana than the criminal justice system," Dr Williams says.

She says policy makers should consider the legalisation of marijuana use and taxing marijuana sales.

While removing criminal sanctions on the possession and cultivation of marijuana would increase the prevalence of its use, "governments can expect to significantly reduce cannabis consumption by taxing sales", Dr Williams says.

Her report also says regulated sales of marijuana could result in less school children using the drug, if governments imposed similar legal age restrictions to those of cigarettes and alcohol.

Dr Williams' findings follow a recent ruling by the Ontario Court of Appeal in Canada that it is unconstitutional for individuals to be denied the right to possess cannabis. She says her research sheds some light on policy alternatives available to the Canadian government, and to governments of other countries.

Dr Jenny Williams is staying at the Hyatt Regency Crystal City in Washington, DC, where the Southern Economic Association's conference is being held: +703 418 1234. email: jenny.williams@adelaide.edu.au

University of Adelaide

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