An economic analysis of the illegal marijuana market in Slovenia

AbstractThe purpose of the article is to analyse the illegal marijuana market in Slovenia. We present an analysis of marijuana consumption patterns and point out which socio-economic and demographic groups are most inclined to marijuana use. We provide an empirical analysis of marijuana demand by calculating odds ratios and marginal effects based on logit and probit discrete choice models. We evaluate the likely size of the industry by estimating the level of consumption and retail expenditure by using data on the prevalence of marijuana use and its retail prices. Our findings provide insights to the marijuana consumption, offer support to government decision-making and evaluation of alternative policy approaches, and give estimates of the likely revenue that the government could raise by subjecting marijuana to taxation in a manner similar to fine-cut tobacco.