Working Paper: NBER ID: w4385
Authors: Michael Grossman; Frank J. Chaloupka; Henry Saffer; Adit Laixuthai
Abstract: In this paper we summarize research that deals with the effects of alcoholic beverage prices and excise taxes on a variety of outcomes for youth. These include alcohol consumption, excessive consumption, motor vehicle accident mortality, and college completion rates. The research employs six nationally representative data sets on individuals that span the period from 1974 through 1989 and two state level data sets for the years 1975-1981 and 19821988. The studies find that alcohol use and motor vehicle accident mortality are negatively related to the cost of alcohol. College completion rates are positively related to this variable. Clearly, these are policy-relevant findings since price is a policy-manipulable variable. Frequently, the effects of a variety of simulated excise tax hikes exceed those of the uniform minimum legal drinking age of 21 in all states.
Keywords: Alcohol price policy; Youth outcomes; Excise taxes; Motor vehicle accidents; College completion
JEL Codes: I18; H23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher alcohol prices (H29) | Decrease in alcohol consumption among youth (J13) |
| Higher alcohol prices (H29) | Reduction in motor vehicle accident mortality rates (R48) |
| Higher alcohol prices (H29) | Positive impact on college completion rates (I24) |