Historical data from British India showed opium and hashish were economic substitutes
Analysis of 1907-1918 Punjab data found that when hashish prices rose, opium consumption increased, demonstrating that consumers treated these drugs as substitutes.
Quick Facts
What This Study Found
Researchers analyzed a unique historical dataset from the Punjab province of British India (1907-1918), where both opium and cannabis were legal and taxed. Using econometric models, they found that opium and hashish (charas) functioned as economic substitutes: when hashish prices increased, opium consumption rose.
The cross-price elasticity was 0.14, meaning a 10% increase in hashish price led to approximately a 1.4% increase in opium consumption. Opium consumption also showed properties of addiction, with past consumption predicting future consumption (habit persistence coefficient of 0.47-0.49).
Interestingly, opium and bhang (cannabis leaf, a milder preparation) were not substitutes, suggesting that the substitution relationship was specific to more potent preparations. Opium demand was slightly responsive to its own price but relatively inelastic, consistent with addictive substances.
Key Numbers
Data from 1907-1918 (n=252). Cross-price elasticity: 0.14 (hashish-opium substitution). Habit persistence: 0.47-0.49. Own-price elasticity: -0.34 to -0.35. Wage income elasticity: 0.15.
How They Did This
Econometric analysis using generalized method of moments (GMM) dynamic panel data models. Analyzed 252 observations from Punjab province, British India (1907-1918), examining opium consumption as a function of its own price, prices of two cannabis forms (bhang and charas), and wage income.
Why This Research Matters
The substitution between cannabis and opioids has major implications for drug policy. If restricting access to one substance pushes users toward a more dangerous alternative, prohibition policies could backfire. This historical natural experiment provides rare evidence from a legal dual-use regime.
The Bigger Picture
Modern debates about whether cannabis legalization reduces or increases opioid use echo patterns observable more than a century ago. This study from a rare legal dual-use period suggests that when cannabis is less available or more expensive, some users shift to opioids.
What This Study Doesn't Tell Us
Data is over 100 years old from a specific cultural and economic context. The potency and forms of cannabis and opium available then differ from modern substances. Price data may not capture black market dynamics. The findings may not generalize to contemporary settings.
Questions This Raises
- ?Do modern legal cannabis markets show similar substitution effects with opioids?
- ?Would the relationship hold for contemporary cannabis and prescription opioids?
- ?Does the substitution effect depend on the potency of available cannabis?
Trust & Context
- Key Stat:
- Cross-price elasticity of 0.14: hashish price up, opium use up
- Evidence Grade:
- Econometric analysis of historical data from a legal dual-use regime. Unique dataset but limited modern applicability.
- Study Age:
- Published in 2015 using data from 1907-1918 British India.
- Original Title:
- Do consumers substitute opium for hashish? An economic analysis of simultaneous cannabinoid and opiate consumption in a legal regime.
- Published In:
- Drug and alcohol dependence, 156, 170-175 (2015)
- Authors:
- Chandra, Siddharth(2), Chandra, Madhur
- Database ID:
- RTHC-00935
Evidence Hierarchy
Watches what happens naturally without intervening.
What do these levels mean? →Frequently Asked Questions
Do people substitute opioids for cannabis?
This historical analysis found that in British India, when hashish prices rose, opium consumption increased, suggesting consumers treated them as substitutes. Whether this pattern holds in modern contexts is still debated.
Why does this historical data matter today?
Legal dual-use regimes where both cannabis and opioids are commercially available and taxed are extremely rare. This historical dataset provides a natural experiment that is difficult to replicate in modern settings.
Read More on RethinkTHC
Cite This Study
https://rethinkthc.com/research/RTHC-00935APA
Chandra, Siddharth; Chandra, Madhur. (2015). Do consumers substitute opium for hashish? An economic analysis of simultaneous cannabinoid and opiate consumption in a legal regime.. Drug and alcohol dependence, 156, 170-175. https://doi.org/10.1016/j.drugalcdep.2015.09.015
MLA
Chandra, Siddharth, et al. "Do consumers substitute opium for hashish? An economic analysis of simultaneous cannabinoid and opiate consumption in a legal regime.." Drug and alcohol dependence, 2015. https://doi.org/10.1016/j.drugalcdep.2015.09.015
RethinkTHC
RethinkTHC Research Database. "Do consumers substitute opium for hashish? An economic analy..." RTHC-00935. Retrieved from https://rethinkthc.com/research/chandra-2015-do-consumers-substitute-opium
Access the Original Study
Study data sourced from PubMed, a service of the U.S. National Library of Medicine, National Institutes of Health.
This study breakdown was produced by the RethinkTHC research team. We analyze and report published research findings without making health recommendations. All interpretations are based solely on the published abstract and study data.