Exogenous shocks and related goods: Drinking and the legalisation of marijuana

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 legalisation would lead to approximately a 4% increase in marijuana consumption, while beer, wine and spirits consumption would fall by 1%, 2% and almost 4%, respectively.