Testing Gateway Theory: do cigarette prices affect illicit drug use?
Testing Gateway Theory: do cigarette prices affect illicit drug use?
Testing Gateway Theory: do cigarette prices affect illicit drug use?
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694 M. Beenstock, G. Rahav / Journal of Health Economics 21 (2002) 679–698<br />
So much for the two-stage investigation of the causal effect of cannabis <strong>use</strong> on hard<br />
<strong>drug</strong> <strong>use</strong>. We now <strong>use</strong> RBP to investigate the same issue. Strictly speaking, RBP is not<br />
appropriate beca<strong>use</strong> we have added a third link to the gateway chain. A recursive trivariate<br />
probit (RTP) estimator is required. Since RTP is non-standard we have carried out the<br />
following approximation.<br />
(a) We <strong>use</strong> RBP to model the link between <strong>cigarette</strong>s and cannabis.<br />
(b) We <strong>use</strong> the results to obtain PPS, the predicted probability for smoking.<br />
(c) We <strong>use</strong> RBP to model the link between cannabis and hard <strong>drug</strong>s, where PPS is <strong>use</strong>d in<br />
the probit model for cannabis.<br />
This procedure estimates RTP in two stages. When we <strong>use</strong> the variables specified in<br />
Tables 2, 3 and 5 we obtain that the estimate of δ is 0.178 (t = 0.708), implying that the<br />
causal effect from cannabis to hard <strong>drug</strong>s is positive, but not statistically significant. The<br />
associated estimate of ρ is 0.835 (S.E. = 0.135). This result confirms the one obtained by<br />
2SL as reported in Table 5. The estimate of ρ strongly suggests that the gateway effect from<br />
cannabis to hard <strong>drug</strong>s is the result of correlation between the unobserved heterogeneity; it<br />
is not causal.<br />
However, δ became statistically significant when certain variables were dropped from the<br />
model for hard <strong>drug</strong>s. When we dropped “pub frequency” and “education 4”, we obtained<br />
an estimate of δ = 2.61 (t = 5.53) and ρ =−0.22 (S.E. = 0.213). While these restrictions<br />
fail a likelihood ratio test, they undermine the degree to which we can confidently reject the<br />
hypothesis that there is no causal gateway effect from cannabis to hard <strong>drug</strong>s.<br />
4.2. Test 2: initiation hazard<br />
In Table 6 we present a CPHM for smoking initiation in which the “personalized” price of<br />
<strong>cigarette</strong>s is clearly significant, implying that the age of <strong>cigarette</strong> initiation varies directly<br />
with the price of <strong>cigarette</strong>s, after controlling for demographic variables. The model also<br />
implies that women start smoking later, as <strong>do</strong> religious people and Israeli born.<br />
Table 6<br />
CPHM for smoking initiation<br />
Variable Coefficient S.E.<br />
Female −0.496400 0.02364<br />
Israel 0.135970 0.03793<br />
Middle East 0.111880 0.03215<br />
Balkan −0.075090 0.03909<br />
Asia −0.268128 0.11848<br />
Eastern Europe −0.152799 0.04350<br />
Education 4 0.216162 0.03074<br />
Religious (high) −0.547501 0.03484<br />
Religious (middle) −0.148835 0.02748<br />
Survey 1989 0.106948 0.02992<br />
Cigarette price −0.001895 0.000313<br />
N = 12,455; −2log L = 13,1067; P-value for χ 2 = 0.0001.
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