Essays on the Aggregate Burden of Alcohol Abuse

This dissertation attempts to uncover the causal relationship between alcohol abuse and both income growth and crime. These two research questions are investigated in three essays: Essay I investigates the relationship between alcohol abuse and income growth in the United States; Essay II examines the impact of alcohol abuse on income growth at the international level; Essay III investigates the effect of alcohol abuse on crime in the united states. Essay I of this dissertation uses state level data from the United States for the period 1970-1998 to estimate the impact of alcohol abuse on income growth by utilizing per capita beer consumption as the measure of alcohol abuse. Results suggest that, even though generally small, there is a negative relationship between alcohol abuse and income growth once the endogeneity between income growth and per capita beer consumption is addressed by utilizing levels of excise alcohol taxes and the Minimum Drinking Age Law of 21 as instruments. These results indirectly favor the previous research on two dimensions: First, alcohol abuse generates a significant burden on the economy; Second, increases in excise alcohol taxes would be efficient in terms of income growth. Essay II of this dissertation uses data from 72 countries for the period 1960-1995 to estimate the impact of alcohol abuse on income growth by utilizing per capita beer, wine, liquor, and total ethanol consumption as the measures of alcohol abuse. Results suggest that, even though generally small, there is a negative significant relationship between per capita beer consumption and income growth once the endogeneity between income growth and per capita beer consumption is addressed with system GMM dynamic panel estimators. These results show that per capita beer consumption is the medium of alcohol abuse not only in the United States, but also around the world. Moreover, these results favor the previous research on the fact that alcohol abuse generates a significant burden on economies. Essay III of this dissertation uses state level data from the United States for the period 1982-2000 to investigate the relationship between crime and alcohol abuse by utilizing per capita beer consumption as the measure of alcohol abuse. Potential endogeneity between per capita beer consumption and crime is addressed by using excise beer taxes and alcohol control measures as instruments. Results show that alcohol abuse seems to have a positive impact overall on the crime rate. Nevertheless, the effect is not uniform among different crime types. In the case of property crime types, results suggest that alcohol abuse plays a more important role in crime types that require a lesser degree of organization and more spontaneity (i.e., larceny theft versus burglary and motor vehicle theft). In the case of violent crime types, results suggest that the impact of alcohol abuse is more pressing in non-murder crime types versus murder. These results have policy implications: excise alcohol taxes and alcohol control policies may play a role in reducing certain crime types, which are larceny theft, rape, robbery, and aggravated assault, but not the other crime types, which are burglary, motor vehicle theft, and murder