Drunken Driving Not Reduced by Higher Alcohol Taxes
3 January 2000
Drunken Driving Not Reduced by Higher Alcohol Taxes; Florida State Researchers Find That Some Existing Laws are Far More Effective Than Sin Taxes
TALLAHASSEE, Fla.--Jan. 3, 2000--Recently published research from two Florida State University economics professors challenges conventional wisdom that extols higher beer taxes as the silver bullet needed to reduce drunken-driving traffic fatalities.In a recent Southern Economic Journal article, "Beer Taxation and Alcohol-Related Traffic Fatalities," FSU's David W. Rasmussen and Bruce L. Benson presented their findings that state-applied beer taxes actually have little or no effect on drunken driving fatalities. Moreover, the researchers found that more effective laws are on the books to reduce DUI fatalities.
"Before we started our research, researcher had already agreed on the effectiveness of beer taxes," said Rasmussen director of the DeVoe Moore Center for Critical Issues in Economic Policy and Government. "To them, it wasn't a question of whether we should raise taxes, it was a question of how high should the taxes be. We challenged the prevailing sentiment that raising taxes accomplished the objective."
For nearly two decades, state legislatures, supported by extensive scholarly research, have raised beer taxes believing that fewer alcohol-related traffic fatalities would occur. "When we went back and controlled for missing variable bias in the existing research, we couldn't replicate the results," said Rasmussen.
The researchers found that after controlling for other factors that determine beer consumption, such as religious sentiment and beer market regulations, taxes simply didn't matter. Furthermore, heavy drinkers - those most likely to drink and drive - were least likely to reduce consumption based on a tax or price increase of their favorite brand.
"States can raise a lot of revenue by raising beer taxes, but they cannot expect a reduction in DUI fatalities from such taxes," stated Benson.
