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by Michael Grossman Henry Saffer Frank Chaloupka Adit Laixuthai National
Bureau of Economic Research, Inc. In this
paper we summarize research that deals with the effects of alcoholic beverage
prices and excise taxes on a variety of outcomes for youth. These include
alcohol consumption, excessive consumption, motor vehicle accident mortality,
and college completion rates. The research employs six nationally representative
data sets on individuals that span the period from 1974 through 1989 and
two state level data sets for years 1975-1981 and 1982-1988. The studies
find that alcohol use and motor vehicle accident mortality are negatively
related to the cost of alcohol. College completion rates are positively
related to this variable. Clearly, these are policy relevant findings
since price is a policy-manipulable variable. Frequently, the effects
of a variety of simulated excise tax hikes exceed those of the uniform
minimum legal drinking age of 21 in all states.
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