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Potential Tax Revenue from a Regulated Marijuana Market A Meaningful Revenue Source
Author(s) -
Caputo Michael R.,
Ostrom Brian J.
Publication year - 1994
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/j.1536-7150.1994.tb02619.x
Subject(s) - revenue , tax revenue , premise , public economics , business , price elasticity of demand , economics , microeconomics , finance , linguistics , philosophy
A bstract . Dissatisfaction with current drug policy measures has led to a push for the regulation of drugs , especially marijuana . On the premise that such regulation is a real possibility, estimates of potential tax revenue from a regulation scheme and critical comments on other estimates of the size of the marijuana market are presented. For 1991, potential tax revenue is estimated to range from 2.55 to 9.09 billion dollars. The uncertainty surrounding the price elasticity of demand for marijuana, home cultivation of marijuana by individual users, and the extent to which purchases may still be made from the black market are discussed, as are their implications for potential tax revenue.