Marijuana liberalization and public finance: A capital market perspective on the passage of medical use laws

• 成果类型: Article
• 署名作者: Cheng, Stephanie F.; De Franco, Gus; Lin, Pengkai
• 署名单位: Tulane University; Singapore Management University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2022.101516
• 发表日期: 2023
• 关键词: cannabis use; state legalization; BORROWING COSTS; adolescent; policies; alcohol; ABUSE

摘要

We find that the staggered passage of state-level laws that legalize marijuana for medical use increases states' borrowing costs by 7e9 basis points. Consistent with economic theory on substance use suggesting that marijuana legalization increases local consumption of the drug (by expanding its availability and reducing its perceived risks), we predict and find that increased consumption represents an important mechanism that explains the higher state bond spreads. We also show that following such laws' passage, states incur higher marijuana-consumption-related expenditures, including for police, corrections, and public welfare.(c) 2022 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).