(1) The paper uses the substitutability between goods to model the transmission to other products of a consumption shock to one product. The framework is used to analyse the impact on drinking of legalisation of marijuana. For all types of consumers for example, the results indicate that...

Australians are among the largest consumers of marijuana in the world, and estimates show that their expenditure on marijuana is about twice that on wine. In this paper we analyse the evolution of marijuana prices in Australia and show that they have declined in real terms by almost 40 percent...