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Essays on the Regulation of Cannabis

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Essays on the Regulation of Cannabis Essays on the regulation of cannabis - A law and economics approach Kumulative Dissertation Zur Erlangung der Würde der Doktorin der Wirtschafts- und Sozialwissenschaften des Fachbereichs Volkswirtschaftslehre der Universität Hamburg (gemäß der Promotionsordnung vom 24. August 2010). Vorgelegt von Ines Reith geboren am 25. Mai 1990 in Bochum. Hamburg, 2016 1 Vorsitzender: Prof. Dr. Maennig Erstgutachter: Prof. Dr. Straubhaar Zweitgutacher: Prof. Dr. Eger Datum der Disputation: 11.12.2015 2 Preface and acknowledgments This dissertation was written in the Graduate School of “The Economics of the Internationalization of the Law” in Hamburg, Germany. The three-year program is funded by the German Research Foundation (DFG) and offers the possibility to investigate a topic of personal choice. I would like to thank the German Research Foundation (DFG) for their generous financial support as well as for the provision of materials and offices. The thesis centers around cannabis regulation in the international context since it is of high interest for all actors involved and offers vast possibilities for analysis. This dissertation is interdisciplinary between law, economics, public health and political sciences and consists of five papers on cannabis policy. I was blessed with helpful and motivating supervisors, namely Prof. Dr. Thomas Straubhaar and Prof. Dr. Thomas Eger. Both of them helped me through constant academic discussions, moral support and devotion of time to my research. I feel very grateful for the efforts of the team at the Hamburg Institute of Law and Economics and Janina Satzer´s good organizational skills. I highly appreciate Jerg Gutmann´s input and knowledge about econometrics. Furthermore, Prof. Dr. Stefan Voigt kept me on the right track to completion of the thesis through his comments. During the time of the Graduate School I was able to spend a semester at the University of Queensland (Brisbane, Australia) as a visiting researcher. My deepest appreciation goes to Professor Wayne Hall and his team for their tireless support and valuable instruction. I did not only learn new skills, but also feel like I grew as a person. Finally yet importantly, I want to praise my mum for bearing with me all those years of studying and endless complaints about bureaucracy at university. I am grateful to have a loving family that always cheered me up. I send kisses to my brother, my grandparents Irene and Bruno and my dad. 3 “Now here's somebody who wants to smoke a marijuana cigarette. If he's caught, he goes to jail. Now is that moral? Is that proper? I think it's absolutely disgraceful that our government, supposed to be our government, should be in the position of converting people who are not harming others into criminals, of destroying their lives, putting them in jail. That's the issue to me.” - Milton Friedman, Economist and Nobel Prize Winner (1991, Interview at America's Drug Forum) “Marijuana is an addictive drug which produces in its users insanity, criminality, and death.” - Harry Anslinger, Commissioner of the US Bureau of Narcotics 1930-1962 (1937, Congressional Hearing on the Marijuana Tax Act) 4 Table of contents Introduction .......................................................................................................................... 10 1. The broader context ...................................................................................................... 10 2. Connection between the cumulative dissertation papers.............................................. 14 3. Paper summaries and presentation opportunities ......................................................... 16 References ........................................................................................................................ 20 Paper I .................................................................................................................................. 22 1. Introduction .................................................................................................................. 23 2. Theoretical background ................................................................................................ 24 2.1 Historical overview ................................................................................................. 24 2.2 Economic theory ..................................................................................................... 27 3. Research question and hypotheses ............................................................................... 32 4. Methodology ................................................................................................................ 36 5. Results .......................................................................................................................... 39 6. Discussion .................................................................................................................... 46 7. Conclusion .................................................................................................................... 48 References ........................................................................................................................ 50 Appendix .......................................................................................................................... 58 Paper II ................................................................................................................................. 59 1. Introduction .................................................................................................................. 60 2. Drug policy framework ................................................................................................ 61 2.1 The political structure of drug policy in the US ..................................................... 61 2.2 The political process of drug policy in the US ....................................................... 64 2.2.1 State politics ................................................................................................... 66 2.2.2 Domestic factors (Population preferences) .................................................... 67 2.2.3 Spatial factors ................................................................................................. 68 2.2.4 Federal and international pressure ................................................................ 70 2.3 The analogy between medical and recreational cannabis deregulation .................. 70 3. Methodology ................................................................................................................ 72 3.1 The outcome variable: An index of cannabis policy .............................................. 72 3.2 The independent variables ...................................................................................... 77 4. Empirical Results ......................................................................................................... 82 5 4.1 Spatial econometric methodology .......................................................................... 82 4.2 Econometric methodology ...................................................................................... 83 4.3 Empirical results ..................................................................................................... 85 5. Discussion .................................................................................................................... 90 6. Policy Outlook.............................................................................................................. 92 References ........................................................................................................................ 93 Appendix 1 - ArcGIS ..................................................................................................... 102 Appendix 2 - Autocorrelations ....................................................................................... 106 Appendix 3 - Correlation matrix .................................................................................... 107 Paper III ............................................................................................................................. 110 1. Introduction ................................................................................................................ 111 2. Theory ........................................................................................................................ 112 2.1 Prevalence of cannabis use and the policy approach ............................................ 112 2.2 Adolescents and cannabis use ............................................................................... 114 3. Economic theory ........................................................................................................ 115 3.1 Rational choice (pro-criminalization) ................................................................... 115 3.2 Behavioral economics (pro-decriminalization) .................................................... 116 4. Methodology .............................................................................................................. 118 4.1 The difference-in-differences approach ................................................................ 118 4.2 Extended model .................................................................................................... 121 4.3 Limitations ...........................................................................................................
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