Cannabis, alcohol and cigarettes: Substitutes or complements?

This paper uses individual level data from the National Drug Strategy House hold Surveys to estimate the price responsiveness of participation in canna bis, alcohol and cigarette use. In addition to own price effects, we estima te cross price effects and the impact of decriminalizing cannabis use. We f ind that participation is responsive to own prices. There is some evidence that cannabis is a substitute for alcohol and a complement to cigarettes. a nd that alcohol and cigarettes are complements. The liberalization of canna bis laws in South Australia may have led to a temporary increase in cannabi s use among the over-30 age group.