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Endogenous Drinking Age Laws and Highway Mortality Rates of Young Drivers

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  • Henry Saffer
  • Michael Grossman

Abstract

This paper presents estimates of the effects of the drinking age and beer taxes on youth motor vehicle mortality. The data set employed is a time series, from 1975 to 1981, of cross sections of the 48 contiguous states. Separate regressions for 15 to 11 year olds, 18 to 20 year olds and 21 to 24 year olds are presented. A simultaneous estimation model is used to account for the endogeneity .of the drinking age. The results show that during the sample period an increase in the drinking age to 21, which is approximately 8 percent, would have reduced mortality in the 18 to 20 year old group by approximately 14 percent. Also a 100 percent increase in the real beer tax, which is approximately $1.50 per case, would reduce highway mortality of 18 to 20 year olds by about 19 percent. This increase in the beer tax would also reduce mortality by about 8 percent for 15 to 17 year olds and by about 18 percent for the 21 to 24 year olds.

Suggested Citation

  • Henry Saffer & Michael Grossman, 1986. "Endogenous Drinking Age Laws and Highway Mortality Rates of Young Drivers," NBER Working Papers 1982, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1982
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    1. Amemiya, Takeshi, 1979. "The Estimation of a Simultaneous-Equation Tobit Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(1), pages 169-181, February.
    2. Dennis C. McCornac, 1982. "The Effects of Government Regulation on Teenage Motor Vehicle Mortality," NBER Working Papers 1030, National Bureau of Economic Research, Inc.
    3. Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
    4. Coate, Douglas & Grossman, Michael, 1988. "Effects of Alcoholic Beverage Prices and Legal Drinking Ages on Youth Alcohol Use," Journal of Law and Economics, University of Chicago Press, vol. 31(1), pages 145-171, April.
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