The paper assumes that damages in the form of deaths and traumatic injuries caused by alcohol-related road accidents constitute a significant part of the negative externalities associated with alcohol consumption. It then compares the conventional Pigouvian solution with the impact that a "sufficiently" high penalty on drunken driving and better law enforcement may have. It is hypothesised that these measures may cause heavy drinkers either to cut back on their consumption of alcohol on occasions when they have to drive a vehicle or to maintain their consumption levels but refrain from driving. The welfare losses are much lower for each of these scenarios and are also carried specifically by those responsible for the negative externality. An attempt is also made to consider how individuals may respond to higher penalties and/or a more effective law enforcement system. Copyright (c) 2008 The Author. Journal compilation (c) 2008 Economic Society of South Africa.
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Volume (Year): 76 (2008) Issue (Month): 4 (December) Pages: 607-611 Download reference. The following formats are available: HTML
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