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Health Consequences of Easier Access to Alcohol: New Zealand Evidence

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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Web page: http://www.colgate.edu/academics/departments-and-programs/economics

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  1. J. Williams & Rosalie Liccardo Pacula & Frank J. Chaloupka & Henry Wechsler, 2004. "Alcohol and marijuana use among college students: economic complements or substitutes?," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 825-843.
  2. William N. Evans & Thomas S. Dee, 2001. "Behavior Policies and Teen Traffic Safety," American Economic Review, American Economic Association, vol. 91(2), pages 91-96, May.
  3. Imbens, Guido W. & Kalyanaraman, Karthik, 2009. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator," IZA Discussion Papers 3995, Institute for the Study of Labor (IZA).
  4. DiNardo, John & Lemieux, Thomas, 2001. "Alcohol, marijuana, and American youth: the unintended consequences of government regulation," Journal of Health Economics, Elsevier, vol. 20(6), pages 991-1010, November.
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  6. Henry Saffer & Frank Chaloupka, 1995. "The Demand for Illicit Drugs," NBER Working Papers 5238, National Bureau of Economic Research, Inc.
  7. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  8. Dee, Thomas S., 1999. "State alcohol policies, teen drinking and traffic fatalities," Journal of Public Economics, Elsevier, vol. 72(2), pages 289-315, May.
  9. Grembi, Veronica & Nannicini, Tommaso & Troiano, Ugo, 2012. "Policy Responses to Fiscal Restraints: A Difference-in-Discontinuities Design," IZA Discussion Papers 6952, Institute for the Study of Labor (IZA).
  10. Yörük, BarIs K. & Yörük, Ceren Ertan, 2011. "The impact of minimum legal drinking age laws on alcohol consumption, smoking, and marijuana use: Evidence from a regression discontinuity design using exact date of birth," Journal of Health Economics, Elsevier, vol. 30(4), pages 740-752, July.
  11. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
  12. 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.
  13. 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.
  14. Ofer Malamud & Cristian Pop-Eleches, 2011. "Home Computer Use and the Development of Human Capital," The Quarterly Journal of Economics, Oxford University Press, vol. 126(2), pages 987-1027.
  15. 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.
  16. Michael Grossman & Frank J. Chaloupka & Charles C. Brown, 1996. "The Demand for Cocaine by Young Adults: A Rational Addiction Approach," NBER Working Papers 5713, National Bureau of Economic Research, Inc.
  17. Jonathan Gruber & Botond Köszegi, 2001. "Is Addiction "Rational"? Theory And Evidence," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1261-1303, November.
  18. Christopher Carpenter & Carlos Dobkin, 2009. "The Effect of Alcohol Consumption on Mortality: Regression Discontinuity Evidence from the Minimum Drinking Age," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 164-82, January.
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