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Prohibition Versus Taxation: Reconsidering The Legal Drinking Age

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  • DONALD S. Kenkel

Abstract

The legal drinking age targets a group at a high risk of alcohol-related problems. This paper argues that taxation could achieve the same benefits as the legal drinking age at a substantially lower social cost. Existing empirical research suggests that simultaneously lowering the legal age to 18 and taxing alcohol purchases at between 12 to 86 percent of the current price would achieve the same results as the current legal age. Levying a special teen tax only on young adults would minimize its social costs. Teen tax revenues between $564 million to $4.03 billion measure the net social gain of replacing the current prohibition on young adults' alcohol purchases with a taxation policy. Copyright 1993 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 11 (1993)
Issue (Month): 3 (07)
Pages: 48-57

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Handle: RePEc:bla:coecpo:v:11:y:1993:i:3:p:48-57

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Cited by:
  1. Christopher J. Ruhm, 1995. "Alcohol Policies and Highway Vehicle Fatalities," NBER Working Papers 5195, National Bureau of Economic Research, Inc.
  2. Adit Laixuthai & Frank J. Chaloupka, 1993. "Youth Alcohol Use and Public Policy," NBER Working Papers 4278, National Bureau of Economic Research, Inc.
  3. Nelson, Jon P., 2001. "Alcohol Advertising and Advertising Bans: A Survey of Research Methods, Results, and Policy Implications," Working Papers 7-01-2, Pennsylvania State University, Department of Economics.
  4. Michael Grossman & Frank J. Chaloupka & Henry Saffer & Adit Laixuthai, 1993. "Effects of Alcohol Price Policy on Youth," NBER Working Papers 4385, National Bureau of Economic Research, Inc.

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