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Our aim was to test the direction of causation between self-report parental monitoring (PM) and the liability to illicit drug initiation (DI) as indicated by cannabis, cocaine, and stimulants. We fitted a multiple indicator model to test causal and non-causal models based on a large, genetically informative cross-sectional sample of male twins. The sample comprised 1,778 males aged 24-62 years from the Virginia Adult Twin Study of Psychiatric and Substance Use Disorders. Data came from self-report measures of lifetime cannabis, stimulants, and cocaine initiation, and retrospective assessment of PM between ages 8-17 years. Multivariate modeling showed that familial aggregation in PM and DI were both explained by a combination of additive genetic and shared environmental effects. Moreover, the significant association between PM and DI was best explained by a correlated liability model versus causal models. PM has typically been assumed to be an environmental, causal risk factor for drug use and has been shown to be among the more salient environmental risk factors for illicit DI. Our data were not consistent with this causal hypothesis. Instead, a correlated liability model in which PM and risk of DI share common genetic and environmental risks provided a better fit to the data.