Abstract
This study examines the effect of retail recreational marijuana legalization on traffic fatalities using the most current data available and recent advancements in difference-in-difference estimation methods proposed by Callaway and Sant'Anna, (2021).
A modified difference-in-difference (CS-DID) is used to estimate the effect of recreational marijuana legalization on traffic fatalities reported in the Fatality Analysis Reporting System (FARS). Difference-in-difference regression models are run at the state-year level, using data from 2007 through 2020, and compared to estimates using traditional two-way-fixed-effects (TWFE) models.
Consistent with past studies, results from conventional TWFE suggest traffic fatalities increase at a rate of 1.2 per billion vehicle miles traveled (BVMT) after retail of recreational marijuana begins. However, using the CS-DID model, we find slightly larger average total treatment effects (∼2.2 fatalities per BVMT). Moreover, the size of the effect changes across time, where cohorts "treated" earlier have substantially higher increases than those who more recently legalized.
Traffic fatalities increase by 2.2 per billion miles driven after retail legalization, which may account for as many as 1400 traffic fatalities annually. States who legalized earlier experienced larger traffic fatality increases. TWFE methods are inadequate for policy evaluation and do not capture heterogeneous effects across time.