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Effects of Alcohol Price Policy on Youth: A Summary of Economic Research Michael Grossman, Frank J. Chaloupka, Henry Saffer, and Adit Laixuthai ABSTRACT In this
article, we summarize research by economists that deals with
the effects of alcoholic beverage prices and excise taxes on
a variety of outcomes for youth. These include alcohol
consumption (both moderate and excessive), 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 the 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, because 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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