An economic analysis of the demand for cannabis: some results from South Africa

Figures & data

Table 1. Sample characteristics.

Variable	Proportion (%)	N
Gender
Male	72.8	1428
Female	27.2	533
Population group
African	9.0	168
Colored	12.0	223
Asian/Indian	4.5	83
White	74.6	1389
Age group
<20	9.0	178
20–29	66.5	1308
30–39	16.5	324
40–49	4.7	92
50+	3.4	66
Province
Western Cape	47.7	943
Gauteng	30.1	594
Other	22.3	440
Monthly income
<R1000 (<$75)	9.7	192
R1000–R4999 ($75–$376)	27.6	546
R5000–R9999 ($376–$752)	20.8	411
R10 000–14 999 ($752–$1128)	14.4	284
R15 000–R19 999 ($1128–$1504)	8.2	163
R20 000–24 999 ($1504–$1880)	6.5	129
≥R25 000 (≥$1880)	12.7	252
Intensity
Once per month (or less)	5.0	97
2–3 times per month	4.3	85
Once per week	5.2	102
2–3 times per week	19.5	381
Daily	66.1	1294
Years as cannabis consumer
1–5 years	44.1	871
6–10 years	32.6	644
≥11 years	23.4	462

Where the sum per category does not equal 1977, this is due to missing values. Monthly income was converted to USD using an average exchange rate for 2017 ($1 = R13.30).

Table 2. Monthly quantity demanded by quality and gender (%).

	Low		Medium		High
	Male	Female	Male	Female	Male	Female
0–10 g	7.3	6.8	10.4	14.6	26.0	31.8
10.1–20 g	15.4	18.2	15.1	14.9	19.9	21.2
20.1–30 g	17.3	13.6	20.7	19.2	19.5	15.6
30.1–50 g	17.3	25.0	21.0	24.7	12.3	11.2
50.1–100 g	24.6	15.9	21.9	18.2	14.8	14.5
>100 g	18.2	20.4	10.9	8.4	7.6	5.6
Total (%)	100	100	100	100	100	100
Total (n)	110	44	743	308	569	179

An average exchange rate for 2017 ($1 = R13.30) is used.

Table 3. Price per gram by quality and gender (%).

	Low		Medium		High
	Male	Female	Male	Female	Male	Female
R0–R10 ($0-$0.75)	66.4	62.2	25.8	25.9	3.5	6.2
R10.1–R20 ($0.76–$1.50)	26.4	20.0	35.1	35.0	8.6	7.3
R20.1–R30 ($1.51–$2.26)	6.4	11.1	17.4	17.2	9.6	11.7
R30.1–R50 ($2.26–$3.76)	0.9	6.7	16.5	17.8	12.8	14.5
R50.1–R100 ($3.77–$7.52)	–	–	5.2	4.2	30.0	25.1
>R100 ($7.52)	–	–	–	–	35.6	35.2
Total (%)	100	100	100	100	100	100
Total (n)	110	45	747	309	571	179

An average exchange rate for 2017 ($1 = R13.30) is used.

Table 4. OLS estimates of cannabis demand.

			%		%		%		%
	(1)	(2a)	(2b)	(3a)	(3b)	(4a)	(4b)	(5a)	(5b)
Ln (price per gram)	−0.501***	−0.613***		−0.462***		−0.528***		−0.493***
	(0.020)	(0.024)		(0.071)		(0.071)		(0.073)
Quality (base: low)
Medium		0.304***	35.5	0.584***	79.3	0.201	22.3	0.353*	42.3
		(0.074)		(0.192)		(0.189)		(0.198)
High		0.595***	81.3	1.095***	198.9	0.634***	88.5	0.646***	90.8
		(0.088)		(0.218)		(0.212)		(0.220)
Ln(price per gram)*quality (base: low)
Ln(price per gram)*medium				−0.138*		−0.026		−0.078
				(0.079)		(0.078)		(0.081)
Ln(price per gram)*high				−0.194**		−0.070		−0.086
				(0.080)		(0.078)		(0.080)
Intensity (base: less than daily)
Daily						0.813***	125.5	0.815***	125.9
						(0.042)		(0.043)
Gender (base: male)
Female								−0.119***	−11.2
								(0.044)
Population group (base: White)
African								0.048	4.9
								(0.073)
Colored								0.075	7.8
								(0.059)
Asian/Indian								0.028	2.8
								(0.093)
Age (base: <20)
20–29								−0.095	−9.1
								(0.075)
30 − 39								−0.182**	−16.6
								(0.092)
40 − 49								−0.105	−10.0
								(0.117)
50+								−0.149	−13.8
								(0.134)
Province (base: Western Cape)
Gauteng								0.115**	12.2
								(0.047)
Other								0.107**	11.3
								(0.051)
Ln (income)								0.024
								(0.022)
Constant	5.005***	4.991***		4.671***		4.366***		4.117***
	(0.065)	(0.085)		(0.163)		(0.166)		(0.250)
Observations	1969	1969		1969		1952		1824
R-squared	0.254	0.271		0.273		0.406		0.415

Dependent variable: logged quantity of cannabis purchased monthly (grams). Robust standard errors in parentheses.

***p<.01, **p<.05, *p<.1.

Figure 1. The monthly demand for cannabis by quality.

Table 5. OLS estimates of cannabis price.

		%
	(1)	(2)
Quality*population group (base: low*White)
Low*African	−0.773***	−53.8
	(0.163)
Low*Colored	−0.384***	−31.9
	(0.125)
Low*Asian/Indian	−0.264*	−23.2
	(0.153)
Medium*African	0.257***	29.3
	(0.097)
Medium*Colored	0.306***	35.8
	(0.092)
Medium*Asian/Indian	0.456***	57.8
	(0.127)
Medium*White	0.633***	88.3
	(0.076)
High*African	1.034***	181.2
	(0.139)
High*Colored	1.415***	311.6
	(0.110)
High*Asian/Indian	1.709***	452.3
	(0.132)
High*White	1.640***	415.5
	(0.081)
Ln (quantity purchased)	−0.436***
	(0.015)
Ln (income)	0.103***
	(0.016)
Gender (base: male)	–
Female	−0.060*	−5.8
	(0.033)
Age (base: 20–29)	–
<20	−0.141***	−13.2
	(0.053)
30–39	0.025	2.5
	(0.042)
40–49	−0.092	−8.8
	(0.084)
50+	−0.185**	−16.9
	(0.087)
Province (base: Western Cape)	–
Gauteng	0.058*	6.0
	(0.034)
Other	−0.035	−3.4
	(0.038)
Intensity (base: less than daily)	–
Daily	0.068**	7.0
	(0.031)
Constant	2.508***
	(0.153)
Observations	1831
R-squared	0.680

Dependent variable: logged price per gram. Robust standard errors in parentheses.

***p < .01, **p < .05, *p < .1.