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Effects of Alcohol Price Policy on Youth

  • Michael Grossman
  • Frank J. Chaloupka
  • Henry Saffer
  • Adit Laixuthai

In this paper we summarize research that deals with the effects of alcoholic beverage prices and excise taxes on a variety of outcomes for youth. These include alcohol consumption, excessive consumption, motor vehicle accident mortality, and college completion rates. The research employs six nationally representative data sets on individuals that span the period from 1974 through 1989 and two state level data sets for the years 1975-1981 and 19821988. The studies find that alcohol use and motor vehicle accident mortality are negatively related to the cost of alcohol. College completion rates are positively related to this variable. Clearly, these are policy-relevant findings since price is a policy-manipulable variable. Frequently, the effects of a variety of simulated excise tax hikes exceed those of the uniform minimum legal drinking age of 21 in all states.

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File URL: http://www.nber.org/papers/w4385.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4385.

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Date of creation: Jun 1993
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Publication status: published as Journal of Research on Adolescence, 4(2), pp. 347-364, (1994).
Handle: RePEc:nbr:nberwo:4385
Note: PE HE
Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Web page: http://www.nber.org
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  1. Manning, Willard G. & Blumberg, Linda & Moulton, Lawrence H., 1995. "The demand for alcohol: The differential response to price," Journal of Health Economics, Elsevier, vol. 14(2), pages 123-148, June.
  2. Gary S.Grossman Becker & Michael Murphy & Kevin M., 1991. "Rational Addiction and the Effect of Price on Consumption," University of Chicago - George G. Stigler Center for Study of Economy and State 68, Chicago - Center for Study of Economy and State.
  3. Frank J. Chaloupka & Henry Saffer & Michael Grossman, 1991. "Alcohol Control Policies and Motor Vehicle Fatalities," NBER Working Papers 3831, National Bureau of Economic Research, Inc.
  4. Henry Saffer & Frank Chaloupka, 1994. "Alcohol Tax Equalization and Social Costs," Eastern Economic Journal, Eastern Economic Association, vol. 20(1), pages 33-43, Winter.
  5. DONALD S. Kenkel, 1993. "Prohibition Versus Taxation: Reconsidering The Legal Drinking Age," Contemporary Economic Policy, Western Economic Association International, vol. 11(3), pages 48-57, 07.
  6. Pogue, Thomas F & Sgontz, Larry G, 1989. "Taxing to Control Social Costs: The Case of Alcohol," American Economic Review, American Economic Association, vol. 79(1), pages 235-43, March.
  7. Phelps, Charles E., 1988. "Death and taxes : An opportunity for substitution," Journal of Health Economics, Elsevier, vol. 7(1), pages 1-24, March.
  8. Cook, Philip J. & Moore, Michael J., 1993. "Drinking and schooling," Journal of Health Economics, Elsevier, vol. 12(4), pages 411-429, December.
  9. Douglas Coate & Michael Grossman, 1986. "Effects of Alcoholic Beverage Prices and Legal Drinking Ages on Youth Alcohol Use," NBER Working Papers 1852, National Bureau of Economic Research, Inc.
  10. Henry Saffer & Michael Grossman, 1986. "Beer Taxes, the Legal Drinking Age, and Youth Motor Vehicle Fatalities," NBER Working Papers 1914, National Bureau of Economic Research, Inc.
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