Author(s): Cook PJ, Durrance CP
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Abstract The last time that federal excise taxes on alcoholic beverages were increased was 1991. The changes were larger than the typical state-level changes that have been used to study price effects, but the consequences have not been assessed due to the lack of a control group. Here we develop and implement a novel method for utilizing interstate heterogeneity to estimate the aggregate effects of a federal tax increase on rates of injury fatality and crime. We provide evidence that the relative importance of alcohol in violence and injury rates is directly related to per capita consumption, and build on that finding to generate estimates. A conservative estimate is that the federal tax (which increased alcohol prices by 6\% initially) reduced injury deaths by 4.5\% (6480 deaths), in 1991, and had a still larger effect on violent crime. Copyright © 2012 Elsevier B.V. All rights reserved.
This article was published in J Health Econ
and referenced in Journal of Forensic Research