Working Paper: NBER ID: w4914
Authors: Christopher J. Ruhm
Abstract: This study investigates the relationship between macroeconomic conditions and two alcohol-related outcomes -- liquor consumption and highway vehicle fatalities. Fixed-effect models are estimated for the 48 contiguous states over the 1975-1988 time period and within-state variations are the focus of analysis. Alcohol consumption and traffic deaths vary procyclically, with a major portion of the effect of economic downturns attributed to reductions in incomes. The intake of hard liquor is the most sensitive to the state of the macroeconomy. There is no evidence, however, that fluctuations in economic conditions have a disproportionate impact on the drunk-driving of young adults.
Keywords: Economic conditions; Alcohol consumption; Traffic fatalities; Health economics
JEL Codes: I12; I18; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Economic downturns (E32) | Decreased incomes (D31) |
| Decreased incomes (D31) | Reduced liquor consumption (L66) |
| Economic downturns (E32) | Reduced liquor consumption (L66) |
| Decreased incomes (D31) | Fewer alcohol-related traffic deaths (R48) |
| Economic downturns (E32) | Fewer alcohol-related traffic deaths (R48) |
| Economic conditions (E66) | Alcohol consumption (L66) |
| Economic conditions (E66) | Highway vehicle fatalities (R48) |