Events at CERGE-EI

Eva Gavrilova, Ph.D.

NHH (Norwegian School of Economics), Bergen, Norway

Authors: Evelina Gavrilova, Takuma Kamada, and Floris Zoutman

Abstract: We examine the effect of medical marijuana laws (MML) on crime treating the introduction of MML as a quasi-experiment and using three different data sources. First, using data from the Uniform Crime Reports, we show that introduction of MML leads to a decrease in homicides, aggravated assaults and robberies in states that border Mexico. We show that the reduction in violent crimes is strongest for counties close to the border, while there is no significant impact of MML on crime for counties located further inland. Second, using Supplementary Homicide Reports' data we show that the decrease in homicides can largely be attributed to a drop in drug-law and juvenile-gang related homicides. Third, using STRIDE data, we show that the introduction of MML in Mexican border states decreases the quantity of cocaine seized, while it increases its price. All three results are consistent with the theory that the introduction of MML reduces activity by Mexican drug trafficking organizations (DTOs) and their affiliated gangs in the border region. MML exposes DTOs to legitimate competition, and substantially reduces their profits in one of their most lucrative drug markets. This results in a decrease in drug- and gang-related crime in the Mexican border area. Our results survive a large variety of robustness checks. The results indicate that decriminalization of the production and distribution of drugs may lead to a reduction in violence in markets where organized drug criminals are replaced by licit competition.

Full Text:  “Is Legal Pot Crippling Mexican Drug Trafficking Organizations? The Effect of Medical Marijuana Laws on US Crime”