When are legal drinking age and tax policies most effective?

A wide variety of public policies affect alcohol purchases, consumption, and traffic fatalities, The two alcohol-control policies that have been most-clearly demonstrated to reduce youth consumption and traffic deaths are raising the minimum legal drinking age (MLDA) and raising beer taxes. Researchers have evaluated the independent effectiveness of these and many other policies. A new study finds that the effectiveness of any particular policy depends on what other policies are also in place.

"Most prior studies indicate that governments can significantly reduce youth traffic fatalities by raising either MLDA or beer taxes," said William R. Ponicki, a researcher at the Prevention Research Center and corresponding author for the study. However, past studies disagree substantially regarding the extent of each policy’s effectiveness. "While some variation in empirical results is certainly due to differences in methodology, various researchers have noted that a specific policy’s effects appear consistently larger in some places or time periods than others. We sought to test whether the impact of a given policy is larger in situations where it represents a bigger proportional increase in the barriers to obtaining and using alcohol."

For this study, Ponicki and colleagues analyzed information gathered from 48 US states during the period of 1975 to 2001, controlling for a number of other variables previously shown to have an effect on vehicle fatalities.

Results showed that raising either MLDA or beer taxes in isolation led to fewer youth-traffic fatalities. However, the study found "an interaction effect;" specifically, changing MLDA caused a larger proportional change in fatalities when beer taxes were low as opposed to when they were high. Similarly, beer taxes were more effective in reducing youth fatalities in states and years where it was legal for youth to buy and consume beer. When it is illegal for youth to buy and consume beer – as it is now in all 50 US states – higher beer taxes are less effective.

"The more a community regulates alcohol availability, the less additional benefit it might expect to achieve from enacting any specified alcohol-policy initiative," said Ponicki. "If a given community has very few existing alcohol-policy restrictions, any proposed new constraint would represent a sizeable proportional change in the overall cost of drinking and driving. If another community already has extremely strong alcohol restrictions, the same proposed new constraint would represent a much smaller proportional change in the full price of drinking. The proposed new constraint thus seems more significant to drinkers in the first community, and would be expected to have more impact on drinking and driving. This paper’s analyses supported this expectation for MLDA and beer taxes."

Both Ponicki and economist Douglas Young of Montana State University suggested that public-policy makers examine a community’s current regulatory environment before creating/imposing new limitations on alcohol availability.

"Public policies cannot and should not be analyzed as if they were independent of each other," said Young. "The impact of any particular policy depends on what other policies are in place."

"Our findings suggest that some of the varying results across past research may simply indicate that a given public policy may not have the same effectiveness in all places and times," said Ponicki. "Specifically, a given policy change, such as a 10-percent beer-tax increase, may not give the same ‘bang for the buck’ when implemented in different situations. Our findings suggest that jurisdictions that have been historically reluctant to regulate alcohol availability currently have the most to gain from implementing any given alcohol policy initiative."

Source: Montana State University