14. Economic theory is ambiguous about whether marijuana and alcohol are In the
ID: 1123947 • Letter: 1
Question
14. Economic theory is ambiguous about whether marijuana and alcohol are In the other 48 states, including the neighboring state of Oregon, the recreational use of marijuana remained illegal. The sale of alcohol has been 8 a) Explain why this provides a natural experiment that could be used to b) What is the primary assumption that you are making if the results from your analysis in part (b) can be taken as the causal effect of marijuana legalization on alcohol consumption? c) To test your assumption in part (c), you construct a plot of alcohol consumption over time in Washington state and in the neighboring state of Oregon. Which of the figures below (top/bottom) would suggest that the internal validity of your study is violated? Explain your choice 2009 2010 2011 2012 2009 2010 2011 2012Explanation / Answer
a. As in the U.S. the Alcohol is banned for the over age of 21 years in all the state of U.S. so that they think it is illegal and banned in the country since 1980s and for this they provide a substitute or complementary product i.e. marijuana but on the other hand we see that in other 48 state inculding the neighbour state i.e. Oregon that the recreation of marijuana is illegal. so in our point of view the U.S. think that the marijuana is less efficient as compared to Alcohol and it doesn't harm any person to that.
b. The primary assumption that we made from this that the Alcohol is not illegal in all the 48 states but except in U.S. might it may fall the impact of this we can see in the graph that in Oregon it is declining year after year.
c. The figure that is been violated is the bottom graph that suggest that if the Alcohol is been banned in Oregon then why should it increase year after year and this will violated the internal validity of our study.
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