title: Do consumers substitute opium for hashish? An economic analysis of simultaneous cannabinoid and opiate consumption in a legal regime.
abstract: OBJECTIVE
  To analyze interrelationships in the consumption of opiates and cannabinoids in a legal regime and, specifically, whether consumers of opiates and cannabinoids treat them as substitutes for each other.
  
  
  METHODS
  Econometric dynamic panel data models for opium consumption are estimated using the generalized method of moments (GMM). A unique dataset containing information about opiate (opium) consumption from the Punjab province of British India for the years 1907-1918 is analyzed (n=252) as a function of its own price, the prices of two forms of cannabis (the leaf (bhang), and the resin (charas, or hashish)), and wage income. Cross-price elasticities are examined to reveal substitution or complementarity between opium and cannabis.
  
  
  RESULTS
  Opium is a substitute for charas (or hashish), with a cross price elasticity (βˆ3) of 0.14 (p<0.05), but not for bhang (cannabis leaves; cross price elasticity=0.00, p>0.10). Opium consumption (βˆ1=0.47 to 0.49, p<0.01) shows properties of habit persistence consistent with addiction. The consumption of opium is slightly responsive (inelastic) to changes in its own price (βˆ2=-0.34 to -0.35, p<0.05 to 0.01) and consumer wages (βˆ1=0.15, p<0.05).
  
  
  CONCLUSIONS
  Opium and hashish, a form of cannabis, are substitutes. In addition, opium consumption displays properties of habit persistence and slight price and wage income responsiveness (inelasticity) consistent with an addictive substance.
authors.affiliation: Asian Studies Center, James Madison College, Department of Epidemiology and Biostatistics, Michigan State University, 427 North Shaw Lane, Suite 301, East Lansing, MI 48824-1035, United States. Electronic address: chandr45@msu.edu.
authors.forename: Siddharth
authors.initials: S
authors.lastname: Chandra
authors.affiliation: Department of Epidemiology and Biostatistics, Michigan State University, 909 Fee Road, Room B601, West Fee Hall, East Lansing, MI 48824, United States. Electronic address: mchandra@epi.msu.edu.
authors.forename: Madhur
authors.initials: M
authors.lastname: Chandra
mesh_terms: D000465:Algorithms; D003132:Commerce; D006801:Humans; D007182:Income; D007194:India / Q000453:epidemiology; D002189:Marijuana Abuse / Q000191:economics* / Q000453:epidemiology* / Q000523:psychology; D017059:Models, Econometric; D009294:Narcotics; D009293:Opioid-Related Disorders / Q000191:economics* / Q000453:epidemiology* / Q000523:psychology; D009892:Opium; D012959:Socioeconomic Factors
chemical_list: D009294:Narcotics; D009892:Opium
keywords: Bhang; Cannabis; Hashish; Opium; Price responsiveness; Substitution effect