Exploring the effects of state differences in alcohol retail restrictions

Paul Byrne and Dmitri Nizovtsev

International Review of Law and Economics, 2017, vol. 50, issue C, 15-24

Abstract: Laws regulating the retail sale of alcoholic beverages vary greatly by state. Whereas some states allow the sale of beer, wine and hard liquor at grocery stores and other retail establishments, others restrict the sale of one or more of the beverage categories to liquor stores. In recent years, several states across the country have considered loosening existing restrictions. This paper examines the impact of retail restrictions on retail sector structure and employment using panel data from the fifty US states and the District of Columbia from 2001 to 2013. Our results suggest that restricting hard liquor and wine sales to liquor stores has no impact on employment, number of establishments or total wages in the liquor store sector. However, restricting the sale of hard liquor, wine and beer to liquor stores has a positive effect on employment, wages, and number of establishments in the liquor store sector. Results in the grocery store sector are sensitive to specification, however, there is no strong evidence that retail restrictions have a corresponding negative effect on the grocery and convenience store sectors. These results contribute to the ongoing policy debates regarding the liberalization of state alcohol retail laws by empirically testing a number of the hypotheses put forth by proponents and opponents of the liberalization debate.

Keywords: Alcohol; State regulation; Retail sector; Liquor stores; Grocery stores (search for similar items in EconPapers)
JEL-codes: D78 H70 L51 L81 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:50:y:2017:i:c:p:15-24

DOI: 10.1016/j.irle.2017.04.001

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