Wednesday, March 01, 2006

Demand for Marijuana

After class today when we were talking about products that are illegal to buy and sell in our country, I started to think about what the effects would be if some of these things were all of the sudden legalized. Would the demand curve shift left or right? Whether or not marijuana should be legalized is a debate that I'm sure we've all heard about, but what is the economic side of the picture? In an article I found on www.about.com, someone asks a question about marijuana legalization. The opinions as to whether this would shift the demand curve left or right varies. The author of the article thinks that the demand would go down because it is not as "cool" when it is legalized. The U.S. Drug Enforcement Agency thinks that the demand for the drug would dramatically rise as a result of being legalized. In a report called "The Budgetary Implications of Marijuana Prohibition, Jeffrey A. Miron, a Professor of Economics at Harvard University suggested that the demand for marijuana would depend on the price, which is true of many things bought in the U.S. In a report called The Economics of Cannabis Legalization, Dale Gieringer, suggests that the demand for marijuana would likely go up after legalization and even suggested another interesting point. He says, " Legalization of cannabis would also divert demand from other drugs, resulting in further savings. If legalization reduced current narcotics enforcement costs by one-third to one-fourth, it might save $6 - $9 billion per year."
It seems that everyone has a different opinion on this topic, but I wonder what really would happen if things that are illegal to buy and sell (marijuana, organs, babies, etc...) were all of the sudden legalized?

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