We thank Ben Machado and Jennine Boughton of ABCI and Steve Whennan from ABS for supplying the data, Ken Clements for helpful discussion and Preety Ramful for research assistance. Financial support from the ARC (large grant no. A00105073) is also kindly acknowledged.
Demand for Marijuana, Alcohol and Tobacco: Participation, Levels of Consumption and Cross-equation Correlations*
Article first published online: 3 DEC 2004
Volume 80, Issue 251, pages 394–410, December 2004
How to Cite
ZHAO, X. and HARRIS, M. N. (2004), Demand for Marijuana, Alcohol and Tobacco: Participation, Levels of Consumption and Cross-equation Correlations. Economic Record, 80: 394–410. doi: 10.1111/j.1475-4932.2004.00197.x
- Issue published online: 3 DEC 2004
- Article first published online: 3 DEC 2004
We investigated marijuana, alcohol and tobacco consumption using micro-unit data from the Australian National Drug Strategy Household Surveys. We estimated a multivariate probit (MVP) model to allow for correlations across participations of different drugs and a sequential model to study separately the determinants of participation and the levels of consumption. The MVP results indicate significant and positive correlations across all three drugs through unobservable characteristics, with the correlation coefficient between marijuana and tobacco being the highest. The MVP approach allows for better prediction of conditional and joint probabilities, providing valuable information for policy makers in a multidrug framework.