The Socioeconomic Impact of Marijuana Legalization in the United States Using Generalized Synthetic Controls

• Activity Number: 322 - Novel Statistical Methods for Current Health Policy Issues
• Type: Contributed
• Date/Time: Wednesday, August 5, 2020 : 10:00 AM to 2:00 PM
• Sponsor: Health Policy Statistics Section
• Author(s): Elina Choi* and Hyunseung Kang
• Companies: University of Wisconsin-Madison and University of Wisconsin-Madison
• Keywords: Marijuana Legalization; Generalized Synthetic Controls; Recreational Marijuana; Causal Effect

Abstract

The potential social impacts of marijuana legalization have been heavily debated over the past decades, as more states have legalized recreational marijuana. Previous literature utilizing a regression-based model suggested no effects of marijuana legalization on crime rates, migration rates, body weight, and educational outcomes. This paper presents a comprehensive analysis of the effect of legalizing recreational marijuana on various socioeconomic and crime-related outcomes, including crime rate by different crime types, income per capita, GDP, incarceration rates, and unemployment rate. We use generalized synthetic controls to assess the causal effect. Our findings support previous studies on the harmlessness of marijuana laws in crime and could be used to support the legalization of marijuana for recreational purposes.