Citation

Ellis CM, Grace MF, Smith RA, Zhang J. Health Econ. 2022; ePub(ePub): ePub.

Copyright

(Copyright © 2022, John Wiley and Sons)

DOI

10.1002/hec.4553

PMID

35691014

Abstract

While many states have legalized medical cannabis, many unintended consequences remain under-studied. We focus on one potential detriment-the effect of cannabis legalization on automobile safety. We examine this relationship through auto insurance premiums. Employing a modern difference-in-differences framework and zip code-level premium data from 2014 to 2019, we find that premiums declined, on average, by $22 per year following medical cannabis legalization. The effect is more substantial in areas near a dispensary and in areas with a higher prevalence of drunk driving before legalization. We estimate that existing legalization has reduced health expenditures related to auto accidents by almost $820 million per year with the potential for a further $350 million reduction if legalized nationally.

Keywords: Cannabis impaired driving

Language: en

Keywords

Cannabis; auto safety; automobile insurance; dispensary; insurance pricing