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Health Consequences of Easier Access to Alcohol: New Zealand Evidence

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Abstract

We evaluate the health effects of a reduction in New Zealand's minimum legal purchase age for alcohol. Difference-in-differences (DD) estimates show a substantial increase in alcohol-related hospitalizations among those newly eligible to purchase liquor, around 24.6% (s.e.=5.5%) for males and 22% (s.e.=8.1%) for females. There is less evidence of an effect among ineligible younger cohorts. There is little evidence of alcohol either complementing or substituting for drugs. We do not find evidence that earlier access to alcohol is associated with learning from experience. We also present regression discontinuity estimates, but emphasize DD estimates since in a simulation of a rational addiction model DD estimates are closer than regression discontinuity estimates to the policy's true effect.

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File URL: http://commons.colgate.edu/cgi/viewcontent.cgi?article=1035&context=econ_facschol
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Paper provided by Department of Economics, Colgate University in its series Working Papers with number 2012-04.

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Date of creation: Jan 2012
Date of revision: 20 Dec 2012
Handle: RePEc:cgt:wpaper:2012-04

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Keywords: alcohol; minimum purchase age; youth; health; hospitalizations; New Zealand;

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  1. Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
  2. Jenny Williams & Rosalie Liccardo Pacula & Frank J. Chaloupka & Henry Wechsler, 2001. "Alcohol and Marijuana Use Among College Students: Economic Complements or Substitutes?," NBER Working Papers 8401, National Bureau of Economic Research, Inc.
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  7. Jasper Gerard, 2007. "Should we raise the age of legal drinking?," Public Policy Review, Institute for Public Policy Research, vol. 14(1), pages 31-35.
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  13. Crost, Benjamin & Guerrero, Santiago, 2012. "The effect of alcohol availability on marijuana use: Evidence from the minimum legal drinking age," Journal of Health Economics, Elsevier, vol. 31(1), pages 112-121.
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  16. Justin McCrary & Heather Royer, 2006. "The Effect of Female Education on Fertility and Infant Health: Evidence from School Entry Policies Using Exact Date of Birth," NBER Working Papers 12329, National Bureau of Economic Research, Inc.
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Cited by:
  1. Lindo, Jason M. & Siminski, Peter & Yerokhin, Oleg, 2014. "Breaking the Link Between Legal Access to Alcohol and Motor Vehicle Accidents: Evidence from New South Wales," IZA Discussion Papers 7930, Institute for the Study of Labor (IZA).
  2. Boes, Stefan & Stillman, Steven, 2013. "Does Changing the Legal Drinking Age Influence Youth Behaviour?," IZA Discussion Papers 7522, Institute for the Study of Labor (IZA).

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