ALCOHOL REGULATION AND DOMESTIC VIOLENCE TOWARDS CHILDREN

In recent years, economists have paid much attention to the demand for alcohol and the negative externalities associated with excessive drinking. Largely ignored in the literature is the link between alcohol use and domestic violence. Given the established positive relationship between alcohol consumption and acts of violence, the purpose of this paper is to examine the role that changes in the determinants of the demand for alcohol may play in reducing the incidence of violence aimed at children. Data on violence come from the 1976 Physical Violence in American Families survey. We estimate a model in which violent outcomes are affected by the state excise tax rate on beer; illegal drug prices, and other regulatory variables such as availability measures and laws restricting the advertising of alcohol. Results show that increasing the tax on beer can be an effective policy tool in reducing violence. Laws designed to make obtaining beer more difficult also may be effective in reducing violence, while restrictions on advertising and increases in illegal drug prices have no effects.     

BINGE DRINKING IN COLLEGE: THE IMPACT OF PRICE, AVAILABILITY, AND ALCOHOL CONTROL POLICIES

This paper estimates the effects of beer prices, alcohol availability, and policies related to driving under the influence of alcohol on drinking and binge drinking among youths and young adults. Data are from a nationally representative survey of students in U.S. colleges and universities. Separate estimates are obtained for underage male and female students, as well as for older male and female students. The estimates indicate that the drinking practices of male college students are generally insensitive to the price of beer. However, underage drinking and binge drinking by female students do respond significantly to price, although both are relatively inelastic. The results also show that strong drunk driving policies targeting youths and young adults significantly reduce drinking and binge drinking by male students. Similarly, these policies reduce drinking among female college students but appear to have little impact on their binge drinking. Instead, the results indicate that many elements of campus life (including participation in a fraternity or sorority, living on campus, and the ready availability of alcoholic beverages) are among the most important determinants of drinking and binge drinking among college students.     

Gas prices,beer taxes and GDL programmes: effects on auto fatalities among young adults in the US

Efforts to reduce teenage driving fatalities can be categorized as: enhancing driving skills, constraining driving behaviour and limiting the exposure of young drivers to the road. This article uses state-year specific Fatality Analysis Reporting System (FARS) data on the motor vehicle fatalities of young adults aged 15–24 to estimate the effects of gasoline prices, beer taxes and the enactment of Graduated Drivers License (GDL) programmes over the 1985–2006 period. Results indicate that a 10% increase in gasoline prices reduce fatalities by 3.2–6.2%. The largest percentage reductions occurred among 15- to 17-year-old drivers. 10% higher beer taxes were estimated to reduce motor vehicle fatalities among young drivers by approximately 1.3%. In this case, there was virtually no effect on 15- to 17-year-old drivers. Finally, the introduction of more restrictive GDL programmes, those with a 6-month learner's permit phase and subsequent limits on early nighttime driving or on the number of passengers, reduced fatalities among 15- to 17-year-old drivers by 24%. The effects on 18- to 21-year-old drivers were smaller and the weakest GDL programmes had no effect on fatalities.     

REPEAL OF PROHIBITION: A BENEFIT‐COST ANALYSIS

In spite of an estimated increase in annual alcohol‐related motor vehicle costs of $2.767 billion (1947 dollars), the net social benefit of repeal of alcohol Prohibition amounts to $432 million per annum in 1934–1937, about 0.33% of gross domestic product. Total benefits of $3.25 billion consist primarily of increased consumer and producer surplus, tax revenues, and reduced criminal violence costs. A Monte Carlo simulation shows the probability of negative net benefits is 16%. The estimated price elasticity of demand for spirits, beer, and wine are –.60, ?.56, and –.51 respectively, which is consistent with the modern literature. (JEL D61, I18, K420, I120)     

The growth effects of tax rates in the OECD

This paper explores the merits of macro‐ and micro‐based tax rate measures within an open economy “fiscal policy and growth” model. Using annual data for 15 OECD countries we find statistically small, non‐robust long‐run growth effects of macro‐based average tax rates on capital income and consumption, but some evidence for average labour income tax effects. Changes in “micro” marginal income tax rates at both the personal and corporate levels yield statistically robust GDP responses of modest size. Both domestic and foreign corporate taxes appear relevant. In general, tax effects on GDP operate largely via factor productivity rather than factor accumulation.     

THE IMPACT OF LARGE CONTAINER BEER PURCHASES ON ALCOHOL‐RELATED FATAL VEHICLE ACCIDENTS

Using a fixed effect weighted least square model, we examine how changes in the share of beer purchases from large containers (>12 oz.) impact alcohol‐related fatal accidents. We find that, after holding beer purchases and overall alcohol‐consumption constant, an increase in total beer purchases from containers greater than the standard size of 12 oz. increases alcohol‐related fatal accidents. We confirm our results persist across several investigations of robustness, as well as the use of instrument variables methods. Outcomes suggest that policy makers should consider differential excise taxes for the purchase of larger than standard size beer containers. Such a policy would likely reduce the number of alcohol‐related fatal vehicle crashes and help to internalize the negative externalities associated with drunk driving. At the very minimum, these results suggest that individuals prone to dangerous levels of drunk driving are the consumers that most prefer large container size consumption. This is consistent with the idea that binge drinkers and beer drinkers are much more likely to drive while legally intoxicated. (JEL I18, K4)     

The Role of State Fiscal Policy in State Economic Growth

Do state policy makers have the ability to affect a state's rate of economic growth? This article examines one possible source of growth and per capita output level disparities by studying the role that state taxation and public expenditure decisions play in fostering economic development. Using pooled annual U.S. state‐level data from 1972 to 1998, a fixed‐effects model is employed to examine the effects of changing tax rates on both state per capita output levels and growth rates. The results indicate that higher tax rates negatively influence short‐run state economic growth, which lowers state output levels. However, long‐run growth is unaffected by changes in state tax rates, even after adjusting for the effects of initial per capita output levels, state expenditures, and aid from the federal government. Nor do changes in state public spending rates and federal aid permanently alter state growth rates, implying that state fiscal policies have only transitory effects on state growth. (JEL H71, O40, R11)     

Wine Tax Reform: The Impact of Introducing a Volumetric Excise Tax for Wine

The recent Henry tax review recommended substantial changes to Australian alcohol taxation policy. Here, the implications for the Australian wine industry of the Henry tax review's recommendations are explored using a computable general equilibrium model. The results show that: (i) replacement of the Wine Equalisation Tax (WET) with a revenue‐neutral volumetric excise tax would have a small negative impact on the wine industry; (ii) removal of the WET rebate would have a substantial negative impact on small wineries; and (iii) applying the packaged beer excise rate across all alcoholic beverages would have a notable negative impact on the wine industry.     

THE IMPACT OF ANTISMOKING POLICIES IN KOREA ON QUIT SUCCESS AND SMOKING INTENTIONS

In 2001 and 2002, the Korean government dramatically increased cigarette taxes, anti‐smoking advertisements, and smoking prohibitions as part of an anti‐smoking campaign. This paper examines the impacts of these policy changes by modeling quit success and smoking intentions pre‐ and post‐policy and attributing model differences to anti‐smoking policies. Model results provide evidence that national anti‐smoking policies increased both quitting success and intention to quit. However, the impacts of these policies are uneven throughout Korean society. Females and those who exercise for health maintenance experienced higher quit success. Heavy smokers and high frequency alcohol drinkers stated they are less likely to quit smoking post‐policy. One impact of national anti‐smoking policies is reduced provincial differences among Koreans in both quit success and intention to quit. Future anti‐smoking policies should address the different needs of these groups. (JEL D12, I19)     

Traffic accidents,deaths and alcohol consumption

The main goal of this article is to analyse the relationship existing among prices of alcoholic beverages, alcohol consumption and traffic fatalities for the Spanish Autonomous Communities during the time interval 1998 to 2002. Among the main results, we highlight a positive correlation between alcohol consumption and traffic mortality rate. Basically, governments implement two kinds of policies to reduce the traffic mortality rate. One is oriented to control the supply of alcohol by increasing alcohol taxes. The other is oriented to preserve traffic security, increasing the number of sanctions for traffic rule infraction. We find evidence that both policies exert a positive influence in the reduction of traffic fatalities. There is no empirical evidence to indicate that being a novice driver increases the tendency to be involved in a mortal traffic accident.     

THE IMPACT OF INSURANCE SUBSIDIES ON SELF‐EMPLOYMENT: DO STATE NON‐GROUP HEALTH INSURANCE REGULATIONS MATTER?

This paper tests whether the effect of tax‐based subsidies for self‐employed health insurance on the level of self‐employment differs with the type of non‐group insurance regulatory regime at the state level. Using a panel of tax returns from 1999 to 2004, we estimate fixed effects instrumental variable regressions for the probability of being self‐employed, allowing the effect of the after‐tax price of self‐employed health insurance to differ by regulatory regime. Our results suggest that states with community rating and guaranteed issue regulations had significantly smaller increases in the fraction of taxpayers reporting some amount of self‐employment income as a result of a decrease in the after‐tax price of self‐employed health insurance. However, there is suggestive evidence that heavily regulated states experienced a larger increase in exclusive self‐employment, particularly among older taxpayers. (JEL J24, H24, I18)     

YOUTH ALCOHOL USE AND PUBLIC POLICY

This paper examines the frequencies of youth drinking and heavy drinking in 1982 and 1989 and separately examines the effects of minimum legal drinking ages and beer excise taxes for each year. In both years, drinking is responsive to price changes resulting from higher excise taxes. However, the price sensitivity of youth alcohol use fell after states changed to a uniform minimum legal drinking age of 21 .     

ESTIMATING CAUSAL EFFECTS OF ALCOHOL ACCESS AND USE ON A BROAD SET OF RISKY BEHAVIORS: REGRESSION DISCONTINUITY EVIDENCE

A growing body of evidence suggests large increases in criminal behavior and mortality coinciding with a young adult's 21st birthday, when alcohol consumption becomes legal. The policy implications from these findings have focused on the need to reduce drinking among young people, potentially by enforcing stricter alcohol controls. However, mortality and arrests are relatively infrequent outcomes and relatively less is known about the intermediate and more prevalent consequences of legal access to alcohol at age 21. This paper uses the Add Health data combined with a regression discontinuity approach to examine the effects of alcohol access on sexual behavior, drunk driving, violence, and other outcomes. The results suggest relatively large effects that appear concentrated in men. The sample also allows some suggestive policy implications on whether changing the minimum drinking age may reduce these consequences. (JEL I12, I18)     

Is there Evidence of Learning‐by‐Exporting in Turkish Manufacturing Industries?

Exporting has always been thought of as one tool to improve productivity and, consequently, to spur economic growth in low‐ to middle‐income economies. However, empirical evidence of this so‐called ‘learning‐by‐exporting’ effect has been limited. This article determines whether learning‐by‐exporting is evident in two Turkish manufacturing sectors—the textile and apparel (T&A) and the motor vehicle and parts (MV&P) industries. A semi‐parametric estimator that controls for problems associated with simultaneity and unobserved plant heterogeneity is used to test the learning‐by‐exporting hypothesis. After controlling for these issues, our results suggest statistically stronger learning‐by‐exporting effects in the T&A than in the MV&P industry. The highly concentrated and capital‐intensive nature of the MV&P industry is the main reason for the lower learning‐by‐exporting effect in this sector. From a policy perspective, this implies that targeting export‐enhancing policies to industries with significant learning‐by‐exporting effects may lead to more productivity gains and would better stimulate an export‐led growth.     

EFFECTS OF HEALTH RISK INFORMATION ON ADDICTIVE GOODS CONSUMPTION: A CASE OF TOBACCO,ALCOHOL, AND BETEL NUTS IN TAIWAN

This paper empirically investigates the relationship between the dissemination of information about the health risks of tobacco, alcohol, and betel nuts and their consumption in Taiwan. To estimate cross‐elasticities, the paper uses the Central Bureau of Statistics demand system model. Empirical results indicate that an increase in the dissemination of information on the health risks of tobacco, alcohol, and betel nuts substantially reduces real consumption. Empirical evidence from the cross‐elasticity of price also confirms that a complementary relationship exists in Taiwan among these three addictive products. (JEL D12, Q11, H26)     

Federal tax policies,congressional voting and natural resources

Can abundance of natural resources affect legislators' voting behaviour over federal tax policies? We construct a political economy model of a federalized economy with district heterogeneity in natural resource abundance. The model shows that representatives of natural resource‐rich districts are more (less) willing to vote in favour of federal tax increases (decreases). This occurs because resource‐rich districts are less responsive to federal tax changes due to the immobile nature of their natural resources. We test the model's predictions using data on roll‐call votes in the US House of Representatives over the major federal tax bills initiated during the period of 1945–2003, in conjunction with the presence of active giant oil fields in US congressional districts. Our identification strategy rests on plausibly exogenous giant oil field discoveries and exploitation and narrative‐based aggregate federal tax shocks that are exogenous to individual congressional districts and legislators. We find that: (i) resource‐rich congressional districts are less responsive to changes in federal taxes and (ii) representatives of resource‐rich congressional districts are more (less) supportive of federal tax increases (decreases), controlling for legislator, congressional district and state indicators. Our results indicate that resource richness is approximately half as dominant as the main determinant, namely party affiliation, in driving legislators' voting behaviour over federal tax policies.     

Public budget composition,fiscal (de)centralization,and welfare

Abstract We study the optimal degree of fiscal decentralization in a dynamic federal economy where governments decide on budget size and its allocation between public education and infrastructure spending. We find that full centralization of tax and expenditure policies is optimal when infrastructure productivity is similar across regions. When differences are not too large, partial centralization is optimal. With strong differences, full decentralization becomes optimal. National steady‐state output tends to be highest under full decentralization. We provide a justification for the mixed evidence regarding the Oates conjecture by showing that full dominates partial decentralization, despite being inferior to complete decentralization.     

TAXING SWEETS: SWEETENER INPUT TAX OR FINAL CONSUMPTION TAX?

Policymakers are considering various policies to reduce obesity and its associated costs, including consumption taxes on high‐calorie foods and specifically sweetened foods. We investigate two tax policies to reduce added sweetener consumption: a consumption tax on sweetened goods and a sweetener input tax. Both tax instruments can reach the same policy target of reducing added sweetener consumption and are found to be regressive. The tax on sweetener inputs targets sweeteners directly and leads to a loss in consumer surplus that is only one‐fifth of that caused by the final consumption tax. Previous analyses have overlooked this important point. (JEL I18, Q18)     

SPECIAL‐INTEREST SPILLOVERS AND TOBACCO TAXATION

This study explores the effects tobacco special interest has had on cigarette tax rates. Using a spatial econometric model to control for tax competition and the endogeneity present in state tax rates, this study finds that tobacco special interest has played a significant role in influencing state cigarette tax rates. Pounds of tobacco grown in a state and tobacco industry campaign contributions are associated with lower cigarette tax rates. The empirical results show that the magnitude of the special‐interest effect can be two to five times as large when the spatial spillover effects are included. (JEL C23, H71, H73)     

The impact of public smoking bans on well‐being externalities: Evidence from a policy experiment

Recent studies on the effects of anti‐smoking policies on subjective well‐being present mixed results and do not account for potential externalities, especially among couples. We contribute to the literature by evaluating the impact of smoking bans on well‐being externalities among smokers and non‐smokers as well as couples of different types of smokers. We exploit the policy experiment provided by the timing of the UK public smoking bans and measure well‐being via the GHQ . We employ matching techniques combined with flexible difference‐in‐differences fixed effects panel data models on data from the British Household Panel Survey. The joint use of matching with fixed effects specifications allows building more comparable treatment and control groups, producing less model‐dependent results and accounting for individual‐level unobserved heterogeneity. We find that public smoking bans appear to have a statistically significant short‐term positive impact on the well‐being of married individuals, especially among women with dependent children. These effects appear to be robust to alternative specifications and placebo tests and are discussed in the light of the economic theory and recent evidence.