Testing Gateway Theory: do cigarette prices affect illicit drug use?

696 M. Beenstock, G. Rahav / Journal of Health Economics 21 (2002) 679–698
spurious gateway effect. The bootstrapped standard errors are based upon 200 resamplings.
Table 8 indicates that PRSC is positive but not statistically significant, implying that there
is not a causal gateway effect from cannabis to hard drugs.
When the age of cannabis initiation is specified instead of PRSC in Table 8, its coefficient
turned out to be negative and highly statistically significant, implying that age at hard drug
initiation varies directly with age at cannabis initiation. This result suggests a gateway
effect from cannabis initiation to hard drug initiation. However, the test in Table 8 shows
that this effect is not causal since it results from unobserved heterogeneity. People who are
susceptible to drugs happen to initiate cannabis sooner, and initiate hard drugs sooner. Thus,
the gateway effect is spurious.
In summary, beginning to smoke at an earlier age induces earlier use of cannabis, which
induces earlier use of hard drugs. The former link in the gateway chain is highly statistically
significant, whereas the latter link is not robust. In these respects, the results from experiment
2 complement those obtained from experiment 1.
5. Conclusion
Controlling for cohort and other effects, people who grew up when cigarettes were relatively
cheap were more likely to smoke, and to start smoking younger. As a causal consequence
they were more likely to use cannabis afterwards and to initiate cannabis sooner. Our
findings from natural experimentation indicate for the first time a causal gateway effect from
cigarettes to cannabis, both for sequencing and for timing. On the other hand, we do not find
a causal gateway effect from cannabis to hard drugs, both for sequencing and for timing.
The latter result has to be qualified by two considerations. Because hard drug use is rare,
hypothesis testing is more difficult. Secondly, the identification of the causal gateway effect
from cannabis to hard drugs was indirect.
These findings imply that higher cigarette taxes will not only reduce cigarette smoking,
they will also reduce cannabis consumption. However, they will not reduce the consumption
of hard drugs. They further imply that if cannabis is decriminalized, and the consumption of
cannabis increases (Model, 1991), it will not effect the consumption of hard drugs. Hence,
if policy makers are reluctant to decriminalize cannabis for gateway reasons our results do
not support this position. It should be recalled, however, that just as the anti-drug legislation
in the early part of the 20th century was politically inspired (Musto, 1973), so scientific
reasoning in the 21st century may not sway the issue.
We admit that our approach has been somewhat ad hoc. This stems from the fact that the
rational addiction model refers to single substances rather than multiple substances. There
is a need to extend the rational addiction model to multiple substances in order to shed
theoretical light upon the gateway phenomenon. Why do some people advance to cannabis
from cigarettes, or from cannabis to hard drugs, while others do not? Such a model might
suggest how the prices of cigarettes, cannabis and hard drugs affect the consumption of these
substances at different stages in the life cycle. In the absence of price data for illicit drugs
in Israel, we have been forced to place all the burden of identification upon cigarette prices.
The availability of illicit drug price data in the US makes the extension of our approach
there of particular interest.