CHANGE IN ALCOHOLIC BEVERAGE PRICES AND LEGAL DRINKING AGES: EFFECTS ON YOUTH ALCOHOL USE AND MOTOR VEHICLE MORTALITY

Abstract

This article presents the first set of estimates of the responsiveness of youth alcohol use and motor vehicle death rates to variations in the price of alcohol. In addition, it examines the sensitivity of these two outcome measures to changes in the legal drinking age. Findings indicate that the use of alcohol by youths (teenagers and young adults) declines when either the price of alcoholic beverages or the legal drinking age increases. In statistical terms, youth alcohol consumption is inversely related at a statistically significant level to beverage price and legal minimum drinking age. Price and legal drinking age are particularly important as determinants of beer consumption. Data analysis through multiple regression indicates a statistically significant decline in the motor vehicle accident mortality rate with the effects of a real beer tax for youths aged 15 through 17, 18 through 20, and 21 through 24. Also, changes in the minimum drinking age produced statistically significant inverse effects on accident mortality for youths aged 18 to 20.