Abstract

This study examines the positive impacts of increased alcohol tax rates experienced by the twelve states that changed their beer, wine, or spirit tax rates from 2000 to 2014. The two dependent variables of interest, alcohol-impaired traffic fatalities and homicides, have well-documented evidence of causal relationships with alcohol tax changes from extensive research history stemming from the 1950’s. To expand beyond previous research, this study focuses on whether the decreases in traffic fatality and homicide rates caused by increased tax rates on alcoholic beverages is different for men and women or varying age groups. A fixed-effects regression is used to evaluate state-level panel data on alcohol-impaired traffic fatality and homicide rates between men, women, and three different age categories. Two separate sets of explanatory variables are used to capture the exogenous factors that best predict the levels of traffic fatalities and homicides in previous literature, with the tax changes represented as the average tax rate change of each different beverage type after new tax rates were put in place. The results show that increases in alcohol tax rates significantly decrease traffic fatalities and homicides in the observed states, and while there are no major differences in the impact between men and women, persons younger than 25 are more affected by the tax increases than persons 25 and older. The findings suggest that future decisions aimed at combating alcohol-related mortality issues take the disparity into consideration and promote complementary policies to balance out the derived impact.