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The effects of merit-based financial aid on drinking in college

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  • Cowan, Benjamin W.
  • White, Dustin R.

Abstract

We study the effect of state-level merit aid programs (such as Georgia's HOPE scholarship) on alcohol consumption among college students. Such programs have the potential to affect drinking through a combination of channels – such as raising students’ disposable income and increasing the incentive to maintain a high GPA – that could theoretically raise or lower alcohol use. We find that the presence of a merit-aid program in one's state generally leads to an overall increase in (heavy) drinking. This effect is concentrated among men, students with lower parental education, older students, and students with high college GPA's. Our findings are robust to several alternative empirical specifications including event-study analyses by year of program adoption. Furthermore, no difference in high-school drinking is observed for students attending college in states with merit-aid programs.

Suggested Citation

  • Cowan, Benjamin W. & White, Dustin R., 2015. "The effects of merit-based financial aid on drinking in college," Journal of Health Economics, Elsevier, vol. 44(C), pages 137-149.
  • Handle: RePEc:eee:jhecon:v:44:y:2015:i:c:p:137-149
    DOI: 10.1016/j.jhealeco.2015.09.002
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    References listed on IDEAS

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    Cited by:

    1. Dustin R. White & Benjamin W. Cowan & Jadrian Wooten, 2017. "March Madness: NCAA Tournament Participation and College Alcohol Use," NBER Working Papers 23821, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Merit aid; Financial aid; Alcohol; Drinking; College;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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