Can economists provide unassailable (and bias-free) marijuana reform cost-benefit analysis?

The question in the title of this post is prompted by this notable AP piece from Oregon headlined “Economist: Benefits of legal pot outweigh societal costs.”  Here are excerpts:

University of Oregon economist said Thursday the best-case estimates for Colorado’s legal marijuana tax revenue were overstated because of a faulty model.  Economist Ben Hansen said at the Oregon Economic Forum that misjudgments in Colorado’s revenue estimates stemmed from a term familiar to students in Econ 101: Elasticity of demand.

Previous estimates of demand for recreational marijuana only looked at the potential shift from the black market to the legal market.  But with the medical market suctioning off some new consumers, revenue forecasts changed.  With various substitutes available, from synthetic marijuana to medical and black-market pot, Hansen said, guessing at the potential revenue impact in Oregon remains difficult….

Colorado has decided to spend pot taxes in arrears, meaning taxes aren’t projected but spent only once collected.  The unusual budgeting maneuver was adopted because the pot market is expected to be highly volatile for the first several years.

Legalizing marijuana increases its supply and drops its price, Hansen said.  That price drop makes additional taxes harder for consumers to notice.  That’s important when the tax rate people pay in Colorado and Washington for legal pot is north of 40 percent. In Oregon, the same rate is anticipated to be about 15 percent.

While police agencies will no longer arrest or fine people caught with marijuana if it’s legalized, Hansen says taxes function as a kind of fine for marijuana consumption. “With legalization, we can kind of double-dip,” Hansen said. “We’re no longer paying to arrest and incarcerate people, and we’re getting tax revenue from it.”

Hansen also says he doesn’t anticipate a dramatic impact on the alcohol market, though he says studies have shown heavy drinking and beer sales decline in markets where medical marijuana is approved.

Harvard University economist Jeffrey Miron said Thursday that Colorado’s medical marijuana market was already commercialized when marijuana was legalized.  “The medicinal market was so commercial, so visible, that for all practical purposes, it was legal,” said Miron.  “Economists consider all that matters are the fundamentals: Can you get access to it, are there barriers to it.

“I just don’t think you (in Oregon) will see any kind of dramatic change. You’re a long way toward a commercial market already.”