Question
Figuring out if two goods are complements or substitutes in consumption can have important policy implications and can inform policy makers in important ways. An
Figuring out if two goods are complements or substitutes in consumption can have important policy implications and can inform policy makers in important ways. An example of this is the debate about the relationship between the use of marijuana and the consumption of alcohol in the United States. Some researchers claim that drug use and alcohol are complementary goods, so that if the consumption of one is discouraged so is the consumption of the other. Some people however believe that they are both substitutes so that when the price of one goes up, the consumption of the other increases. These views lead to very different recommendations in terms of economic policy. Do their results have conclusions in terms of economic policy?
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