AUSTRALIANS SPEND MORE ON POT THAN WINE

Australia's reputation as a nation of big drinkers is
going up in smoke with research released this week showing vast
untaxed expenditure on marijuana.

Researchers at the University of Western Australia's Economic Research
Centre have found that Australians spend almost as much on illegal
cannabis as they do on their beloved beer and twice as much as they do
on wine.

"Expenditure on marijuana in 1995 was a little over A$5 billion
(US$3.25 billion) or A$351 per capita," said researchers Professor Ken
Clements and Mert Daryal in a paper entitled "The Economics of
Marijuana Consumption".

The estimated pot expenditure was equivalent to one percent of
Australia's 1995 gross domestic product, far higher than was
previously estimated.

It represented double the expenditure on wine and three-quarters of
the money spent on beer.

Clements and Daryal also found direct link between pot consumption and
drinking habits. Experience in other countries had suggested
liberalisation of marijuana laws results in a fall in alcohol
consumption.

"Alcohol and marijuana seem to be substitutes, with cross-price
elasticities," they said.

"In most cases, (liberalised) legislation lowers drinking. Spirits
consumption falls the most, then wine and then beer," they said.

The researchers said they hoped to gain a better understanding of the
economics of a drug which they estimate "is used by something like
one-third of the entire adult population" but which "generates no tax
revenue".

Their paper also included a survey of University of Western Australia
first year students which found that about 50 percent had used marijuana.

Not surprisingly, the report found that legalising marijuana would
"increase consumption by about 13 percent ... and alcohol consumption
would fall".

Clements and Daryal said that "in view of the large number of people
who have used marijuana" and that expenditure is twice that on wine
"it is surprising that more is not known about these intriguing matters".

Most of the marijuana consumed in Australia is grown in remote tracts
of the island continent.