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Jul 24, 2014

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Taxes and alcohol consumption debated

Recent studies come down on both side of issue

Feb 2, 2000 - Are higher taxes an effective way to regulate consumption of alcohol? Recent studies come to conflicting conclusions.

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Two economists at the National Bureau of Economic Research received national attention for a report that determined that for every 10% rise in the price of beer, the percentage of students who commit violent and nonviolent campus crimes would be lowered by 4% overall.

Michael Grossman and Sara Markowitz correlated the price of beer in different regions of the country to a variety of behaviors, such as getting into trouble with police or other campus authorities, arguing verbally or fighting physically, damaging property, pulling a fire alarm and sexual misconduct.

"That's a very broad definition of violence [Grossman and Markowitz] used," said Tom Evans, director of public safety at Drew University in New Jersey. "If you use that kind of broad definition, almost every student would be involved."

Meanwhile, two Florida State University economics professors have published research that refutes the belief that higher taxes on beer and other alcoholic drinks reduce drunken driving traffic fatalities, BEERWeek reported last month. David W. Rasmussen and Bruce L. Benson noted that after researching other factors that contribute to beer consumption, like religious beliefs and beer market regulations, taxes "simply didn't matter."

Heavy drinkers, who are most likely to drink and drive, were found to be least affected by higher taxation or higher prices. "States can raise a lot of revenue by raising beer taxes," said Benson, "but they cannot expect a reduction in DUI fatalities from such taxes."


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