Alcoholic Beverage License Population Quotas and Restaurant Availability and Restaurant Quality in New Jersey

Douglas Coate ()

Working Papers Rutgers University, Newark from Department of Economics, Rutgers University, Newark

Abstract: In this paper I use restaurant data from Google Maps to examine how population restricted on premise alcoholic beverage licensing in New Jersey impacts restaurant availability, restaurant quality, and restaurant longevity. I do this, in part, by comparing restaurant data from Bergen County, New Jersey with restaurant data in population quota free Westchester County, New York. I find no evidence that New Jersey’s alcohol control policies result in fewer full service restaurants or restaurants of lower quality in Bergen as compared to laissez-faire licensing Westchester. In fact, there were 32% more full service restaurants in Bergen than in Westchester, counties with very similar population, incomes, age, race and ethnicity, and education levels. The best explanation for this difference appears to be the liberal BYOB policies in Bergen, which lower the full price of a restaurant meal with alcoholic beverages, coupled with a substantial restaurant meal price elasticity. I also estimate reduced form cross county models of the number of full service and the number of limited service restaurants in the US, which show the number of these restaurants differ not only by population but by total employment, tourism, education levels, population density, and race and ethnicity in the county. This means that a top-down one-size-fits-all resident population licensing formula, such as in New Jersey, will not be able to match full service restaurant numbers with full-service meal and beverage restaurant demand across municipalities with different characteristics.

Keywords: restaurants; liquor licenses; New Jersey (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2023-01
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