DO STATE EXCISE TAXES REDUCE ALCOHOL‐RELATED FATAL MOTOR VEHICLE CRASHES?

Robert McClelland and John Iselin

Economic Inquiry, 2019, vol. 57, issue 4, 1821-1841

Abstract: We study the effect of alcohol excise taxes on alcohol‐related fatal traffic crashes by examining two large increases in excise taxes in Illinois that occurred in 1999 and in 2009. Using the synthetic control method, we do not find evidence that the tax increases led to a long‐term reduction in fatal alcohol‐related motor vehicle crashes following either tax increase. These results are robust across several specifications and pass sensitivity tests. However, we find evidence that following the 2009 increase Illinois counties that do not share a border with another state experienced a temporary drop in alcohol‐related traffic fatalities. (JEL H71, H75, 118)

Date: 2019
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