Effects of Marijuana Legalization
on crime:
A case of Illinois
Rabinson Pahiju
Background
The first full legalization of Marijuana began in 2012 starting from Colorado and Washington
Till today- 20 states and District of Columbia has fully legalized Marijuana and expect others to
follow.
Implications of Marijuana Legalization
Legalizing recreational marijuana improves access to marijuana and thereby reducing prices.
Legalization of recreational marijuana will decrease illicit cannabis markets and may decrease
crime rates.
Legalizing marijuana may displace illicit market and benefit state in the form of increased tax
revenue and decreased enforcement cost. (Brinkman and Lamme, 2019)
Previous Literature
There are few papers studying effects of full legalization of marijuana in Colorado and Oregon.
Brinkman and Lamme, 2019- The effect of Marijuana legalization on Neighborhood crime.
• Recreational Marijuana was legalized in Colorado in 2014 but many municipalities in Colorado still
prohibit sales within their own jurisdictions.
• So, people from neighboring municipalities of Denver, where sales is prohibited, often purchase
marijuana from Denver. This increase demand for marijuana dispensaries in Denver.
• Findings: Adding a dispensary is associated with roughly 19% decline in crime.
In contrast to the study by Brinkman and Lamme, Wu. et al., 2021- provided evidence for negative
effect on crime rates of recreation marijuana legalization.
The marijuana law in legalized state are not uniform, so the findings cannot be generalized
Objective
Study the effect of legalizing recreational Marijuana on Violent Crime in Illinois
Why Illinois?
• Previous studies are predominately focused on Colorado, Washington and Oregon
• Illinois recently legalized recreational Marijuana in May 2019 with the passage of
Illinois Cannabis Regulation and Tax Act, effective from Jan 2020.
• The neighboring states haven’t yet legalized cannabis.
Research Design
Study pre period (2018-2019)-post period (2020,2021)from effective date of legalization.
Possible designs:
1. Compare county level crime rates between Illinois and neighboring states, Missouri, Indiana,
Milwaukee, Kentucky and Iowa- Use DID
2. Compare county level crime rates within MSA spanning bordering states of Illinois- Use Spatial
Regression Discontinuity Design
Spatial Regression Discontinuity
MSA’s
Chicago- Naperville-Elgin
St. Louis
Davenport-Moline-Rock Island
Spatial Regression Discontinuity
Counties in the MSA on both sides are similar and the key
difference is the state marijuana law.
State lines provide sharp cut off with the MSA. We can treat all
counties in neighboring states in these MSA’s as control group
and counties of Illinois in these MSA’s as treated group
Data
Violent crime data from 2018-2021 for MSA’s : Chicago- Naperville- Eglin, St. Louis, and
Davenport-Moline-Rock Island - FBI’s Uniform Crime Reporting database
County level data from 2018-2021 for counties in our study - FBI’s Uniform Crime Reporting
database (datasource)
Limitations: I only have data for pre period.