Marijuana price estimates and the price elasticity of demand.

This study estimates marijuana prices for every stateand the District of Columbia by using historical price data ofmarijuana purchases. A regional price index is constructed andused to estimate regional price differences of marijuana prices forthe years 2002-2007. These price estimates are then utilized tocalculate recent average price elasticity of demand and the resultsare compared to the existing literature on price elasticity asmeasure of accuracy of our marijuana price estimate model. Theaverage price elasticity of demand (PED) for marijuana (less than10 grams) for the time period 2002-2007 for all ages within the 50states and the District of Columbia is -0.44. The PED varies byage group, 12-18 Resulting in a PED for ages 12-17 of -1.01, 18-25of -0.34, and > 26 of 0.17. Significant differences concerning thesensitivity to marijuana prices exist based on age.