This study examines the effect of state excise taxes on different types of alcoholic beverages (spirits, wine, and beer) on alcohol-attributable injury mortalities—deaths caused by motor vehicle accidents, suicides, homicides, and falls—in the United States between 1995 and 2004, using state-level panel data. There is evidence that injury deaths attributable to alcohol respond differently to changes in state excise taxes on alcohol-specific beverages. This study examines the direct relationship between injury deaths and excise taxes without testing the degree of the association between excise taxes and alcohol consumption. The study finds that beer taxes are negatively related to motor vehicle accident mortality, while wine taxes are negatively associated with suicides and falls. The positive coefficient of the spirit taxes on falls implies a substitution effect between spirits and wine, suggesting that an increase in spirit tax will cause spirit buyers to purchase more wine. This study finds no evidence of a relationship between homicides and state excise taxes on alcohol. Thus, the study concludes that injury deaths attributable to alcohol respond differently to the excise taxes on different types of alcoholic beverages.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Price excludes VAT (USA)
Tax calculation will be finalised during checkout.
Under the age of 25, cause of death is more likely to involve a motor vehicle accident. The deaths of persons over ages of 65 are more likely to engage other factors unrelated to alcohol use. It is also worth noting that older people respond very little to price changes of alcoholic beverages. The net effect of alcohol consumption on mortality rates among older people is slim .
Revision did not modify the classification used in this paper, and no adjustment was required.
Taxes on sprits in percent are extremely high compared to those on wine as explained above.
The homicide regression has the only positive coefficient for the cigarette tax with a P-value of 0.591.
Let T be tax revenue, t be the tax rate, and X be consumption of beer; Then T = tX. Differentiating T with respect to t and noting that X = X(R), where R = P + t, and P is the price exclusive of tax, yields dT/dt = X + t(dX/dR)dR/dt. Assuming dR/dt = 1 since the supply curve of beer is infinitely elastic, yields dT/dt = X [1 + dx/dR)(R/X)(t/R)]. We can rewrite this as dT/dt = X [1 − (t/R)e], where e is the price elasticity of demand for beer [e = −(dX/dR)(R/X)]. As one can see, dT/dt > 0 if e < R/t. Since R/t > 1, T rises with t even if e > 1 as long as e is smaller than R/t.
Adekoya, N., Moffett, D.B.: State-specific unintentional-injury deaths—United States, 1999–2004. MMWR Wkly 56(43), 1137–1140 (2007)
Alcohol Research & Health, Health Risks and Benefits of Alcohol Consumption. 24 (1), (2000)
Caces, M.F., Elliott, S.D., Noble, J.A., Stinson, F.: Comparative alcohol-related mortality statistics in the United States by State, 1979–1985. Alcohol Health & Research World, Spring (1991)
Caces, M.F., Harford, T.: Time series analysis of alcohol consumption and suicide mortality in the United States, 1934–1987. J. Stud. Alcohol 59(4), 455–461 (1998)
CDC: Surveillance, assessment of alcohol-related mortality–United States, 1980. MMWR 34(12), 161–163 (1980)
Chaloupka, F.J.: Effects of price on alcohol-related problems. Alcohol Health Res. World 17(1), 46–53 (1993)
Chaloupka, F.J., Grossman, M., Saffer, H.: The effect of price on alcohol consumption and alcohol-related problems. Alcohol Health Res. World 26(1), 22–43 (2002)
Chaloupka, F.J., Wechsler, H.: Binge drinking in college: the impact of price, availability, and alcohol control policies. Contemp. Econ. Policy 14(4), (1996)
Cook, P.J., Ostermann, J., Sloan, F.A.: The net effect of an alcohol tax increase on death rates in middle age. Alcohol Taxation Control 95(2), 278–281 (2005)
Cook, P.J., Tauchen, G.: The effect of liquor taxes on heavy drinking. Bell J. Econ. 13(2), 379–390 (1982)
Ellison, C.R.: Importance of pattern of alcohol consumption. Circulation 112, 3818–3819 (2005)
Freeman, D.: Alternative panel estimates of alcohol demand, taxation, and the business cycle. South. Econ. J. 67(2), 325–344 (2000)
Gmel, G., Rehm, J.: Harmful alcohol use. Alcohol Res. Health, 27(1), 52–62 (2003)
Greene, W.H.: Econometric analysis. Macmillan, New York (1993)
Grossman, M., Chaloupka, F.J., Becker, G.S., Murphy, K.M.: Alcohol addiction: an econometric analysis. Presented at the annual meeting of the American economic association, Anaheim, California (1993)
Grossman, M., Chaloupka, F.J., Sirtalan, I.: An empirical analysis of alcohol addiction: results from monitoring the future panels. Econ. Inq. 36(1), 39–46 (1998)
Grossman, M., Son, C.H.: Racial differences in effects of regulatory variables on alcohol-related mortality. In: Public policy and alcohol abuse among minorities. Final Report, Grant Number 5 R01 AA09435, National Institute on Alcohol Abuse and Alcoholism, US Department of Health and Human Services. University of Illinois at Chicago and National Bureau of Economic of Economic Research, Chicago and New York, February (2001)
Gulliver, S., Kalman, D., Rohsenow, D., Colby, S.M., Eaton, C.A., Monti, P.M.: Smoking and drinking among alcoholics in treatment: cross-sectional and longitudinal relationships. J. Stud. Alcohol 61, 157–163 (2000)
Hammer, T.: Unemployment and use of drug and alcohol among young people: a longitudinal study in the general population. Br. J. Addict. 87, 1571–1581 (1992)
Heien, D., Pompelli, G.: The demand for alcohol beverages: economic and demographic effects. South. Econ. J. 55(3), 759–770 (1989)
Hingson, R.W., Howland, J.: Alcohol and non-traffic unintended injuries. Addiction 88, 877–883 (1993)
Janlert, U., Hammarström, A.: Alcohol consumption among unemployed youths: results from a prospective study. Br. J. Addict. 87, 703–714 (1992)
Klatsky, A.L., Armstrong, M.A., Kipp, H.: Correlates of alcoholic beverage preference: traits of persons who choose wine, liquor or beer. Br. J. Addict. 85, 1279–1289 (1990)
Lee, A.J., Crombie, I.K., Smith, W.C.S., Tunstall-Pedoe, H.: Alcohol consumption and unemployment among men: the scottish heart health study. Br. J. Addict. 85, 1165–1170 (1990)
Lindquist, C., Cockerham, W.C., Hwang, S.S.: Drinking patterns in the American deep south. J. Stud. Alcohol Drugs 60(5), 663–666 (1999)
Mann, R.E., Suurvali, H.M., Smart, R.G.: The relationship between alcohol use and mortality rates from injuries: a comparison of measures. Am. J. Drug Alcohol Abuse 27(4), 737–747 (2001)
Marcotte, D.E.: The economics of suicide, revisited. South. Econ. J. 69(3), 628–643 (2003)
Mast, B.D., Benson, B.L., Rasmussen, D.W.: Beer taxation and alcohol-related traffic fatalities. South. Econ. J. 66(2), 214–249 (1999)
Midanik, L.T., Chaloupka, F.J., Saitz, R., Toomey, T.L.: Alcohol-attributable deaths and years of potential life lost—United States, 2001. Morb. Mortal. Wkly. Rep. 53(37), 866–870 (2004)
Mukamal, K.J., Maclure, M., Muller, J.E., Mittleman, M.A.: Binge drinking and mortality after acute myocardial infarction. Circulation 112, 3839–3845 (2005)
Nelson, J.P.: Advertising bans, monopoly, and alcohol demand: testing for substitution effect using state panel data. Rev. Ind. Organ. 22(1), 1–25 (2003)
Norström, T.: Effects on criminal violence of different beverage types and private and public drinking. Addiction 93(5), 689–699 (1998)
Parker, R.N., Cartmill, R.S.: Alcohol and homicide in the United States 1934–1995–or one reason why U.S. rates of violence may be going down. Am. J. Drug Alcohol Abuse 88(4), 1369–1398 (1998)
Plugge, E., Fletcher, L., Stewart-Brown, S.: Risk of injury and the consumption of different types of beverage: is there an association? J. Epidemiol. Community Health 55(11), 789–790 (2001)
Ponicki, W.R., Gruenewald, P.J.: The impact of alcohol taxation on liver cirrhosis mortality. J. Stud. Alcohol 67(6), 934–938 (2006)
Powell, K.E., Kresnow, M., Mercy, J.A., Potter, L.B.: Alcohol consumption and nearly lethal suicide attempts. Suicide Life Threat. Behav. 32, 30–41 (2001)
Ravenholt, R.T.: Addiction mortality in the United States, 1980: tobacco, alcohol, and other substances. Popul. Dev. Rev. 10(4), 697–724 (1984)
Saffer, H., Grossman, M.: Beer taxes, the legal drinking age, and youth motor vehicle fatalities. J. Legal Stud. 16(2), 351–374 (1987)
Sher, L.: Alcohol consumption and suicide. Q. J. Med. 99, 57–61 (2005)
Sjögren, H., Valverius, P., Eriksson, A.: Gender differences in role of alcohol in fatal injury events. Eur. J. Pub. Health 6(3), 266–270 (2006)
Sloan, F.A., Reilly, B.A., Schenzler, C.: Effects of prices, civil and criminal sanctions, and law enforcement on alcohol-related mortality. J. Stud. Alcohol 55(4), 454–465 (1994)
Smart, R.G.: Behavioral and social consequences related to the consumption of different beverage types. J. Stud. Alcohol 57, 77–84 (1996)
Smith, G.S., Branas, C.C., Miller, T.R.: Fatal nontraffic injuries involving alcohol: a metaanalysis. Ann. Emerg. Med. 33(6), 659–668 (1999)
Stockwell, T., Masters, L., Philips, M., Daly, A.: Consumption of different alcoholic beverages as predictors of local rates of night-time assault and acute alcohol-related morbidity. Aust. N. Z. J. Public Health 22(2), 237–242 (1998)
Strandberg, T.E., Strandberg, A.Y., Salomaa, V.V., Pitkälä, K.: Alcoholic beverage preference, 29-year mortality, and quality of life in men in old age. J. Gerontol. 62A(2), 213–218 (2007)
Theobald, H., Johansson, S., Engfeldt, P.: Influence of different types of alcoholic beverages on self-reported health status. Alcohol Alcohol. 38(6), 583–588 (2003)
Thun, M.J., Peto, R., Lopez, A.D., Monaco, J.H., Henley, S.J.: Alcohol consumption and mortality among middle-aged and elderly U.S. adults. N. Engl. J. Med. 337(24), 1705–1714 (1997)
U.S. Fire Administration/National Fire Data Center: Establishing a relationship between alcohol and casualties of fire. Top. Fire Res. Ser. 3(3) (2003)
Weitzman, E.R., Folkman, A., Folkman, K.L., Wechsler, H.: The relationship of alcohol outlet density to heavy and frequent drinking and drinking-related problems among college students at eight Universities. Health Place 9(1), 1–6 (2003)
Young, D.J., Bielinska-Kwapisz, A.: Alcohol consumption, beverage prices and measurement error. The National Institute on Alcohol Abuse and Alcoholism under grant number R03 AA13264, 2001 WEA International Conference (2001)
Young, D.J., Bielinska-Kwapisz, A.: Alcohol taxes and beverage prices. National Tax J. 55(1), 57–73 (2002)
We would like to thank Michael Grossman, Naci H. Mocan, and two anonymous referees for helpful comments.
Rights and permissions
About this article
Cite this article
Son, C.H., Topyan, K. The effect of alcoholic beverage excise tax on alcohol-attributable injury mortalities. Eur J Health Econ 12, 103–113 (2011). https://doi.org/10.1007/s10198-010-0231-9
- Alcohol tax
- Excise tax
- Injury death
- Alcohol consumption