Marijuana Legalization And Household Spending On Food And Alcohol

Utilizing the Consumer Expenditure Interview Survey from 2005 to 2019, I study spending on food and alcohol following recreational marijuana law (RML). Exploiting differences in the timing of the passage of RMLs and employing two-way fixed-effects methods, I find that households located in states adopting these laws increase their quarterly spending on food, which is driven mainly by spending on food consumed away from home. Legalization of recreational marijuana also leads to increased quarterly spending on alcohol. These findings suggest a complementarity between food, alcohol, and marijuana.