Alcohol Prices, Consumption, and Traffic Fatalities

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Abstract
We examine the relationships among alcohol prices, consumption and traffic fatalities using data across U.S. states from 1982-2000. Some previous studies have found large, negative associations between alcohol taxesand fatalities. However, commonly-used price data suggest little or no connection between alcohol pricesand fatalities. These apparently conflicting findings may result from measurement,error and/or endogeneity in the price data, which biases ordinary least squares estimators toward a finding of no price effects. Using alcohol taxes as instrumental variables, fatalities are found to be negatively related to prices. In addition, alcohol consumption is strongly positively related to fatalities. However, biases may still remain, because taxes are not entirely suitable as instruments. Page 1 http://www.cdc.gov/nchs/data/nvsr/nvsr49/nvsr49_08.pdfTable 10

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