Cameron M Ellis, Martin F Grace, Rhet A Smith, Juan Zhang

Published in Health Economics

 June 2022



While many states have legalized medical cannabis, many unintended consequences remain under-studied. We focus on one potential detriment-the effect of cannabis legalization on automobile safety. We examine this relationship through auto insurance premiums. Employing a modern difference-in-differences framework and zip code-level premium data from 2014 to 2019, we find that premiums declined, on average, by $22 per year following medical cannabis legalization. The effect is more substantial in areas near a dispensary and in areas with a higher prevalence of drunk driving before legalization. We estimate that existing legalization has reduced health expenditures related to auto accidents by almost $820 million per year with the potential for a further $350 million reduction if legalized nationally.


DOI: 10.1002/hec.4553



Citation: Ellis, C. M., Grace, M. F., Smith, R. A., & Zhang, J. (2022). Medical cannabis and automobile accidents: Evidence from auto insurance. Health economics.