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Recent studies have shown that efforts to curb youths' alcohol use, such as increasing the price of alcohol or limiting youths' access, have succeeded but may have had the unintended consequence of increasing marijuana use. This possibility is troubling in light of the doubling of teen marijuana use from 1990 to 1997. What impact will recent increases in cigarette prices have on the demand for other substances, such as marijuana? To better understand how the demand for marijuana and tobacco responds to changes in the policies and prices that affect their use, we explore the National Household Survey on Drug Abuse (NHSDA) from 1990 to 1996. We find evidence that both higher fines for marijuana possession and increased probability of arrest decrease the probability that a young adult will use marijuana. We also find that higher cigarette taxes appear to decrease the intensity of marijuana use and may have a modest negative effect on the probability of use among males. [ABSTRACT FROM AUTHOR]

A recent study published in the Journal of Health Economics by French and Zarkin [French, M.T., Zarkin, G.A., 1995. Is moderate alcohol use related to wages? Evidence from four worksites, Journal of Health Economics 14, 319-344] found evidence of a positive, inverse-U-shaped relationship between wages and alcohol consumption for individuals at four worksites. In this paper, we attempted to replicate French and Zarkin's findings using a combined sample of prime-age workers from the 1991 and 1992 National Household Surveys on Drug Abuse (NHSDA). Whereas French and Zarkin found that individuals who consume approximately 1.5 to 2.5 drinks per day have higher wages than non-drinkers and heavy drinkers, we found no evidence of a turning point at this consumption level for either men or women. Our results do suggest that men who use alcohol have approximately 7% higher wages than men who do not drink, and this apparent wage premium is approximately the same over a wide range of alcohol consumption. For women, the estimated alcohol use premium is approximately half as large as for men and is statistically insignificant. [ABSTRACT FROM AUTHOR]