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Exploring the effects of state differences in alcohol retail restrictions

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  • Byrne, Paul
  • Nizovtsev, Dmitri

Abstract

Laws regulating the retail sale of alcoholic beverages vary greatly by state. Whereas some states allow the sale of beer, wine and hard liquor at grocery stores and other retail establishments, others restrict the sale of one or more of the beverage categories to liquor stores. In recent years, several states across the country have considered loosening existing restrictions. This paper examines the impact of retail restrictions on retail sector structure and employment using panel data from the fifty US states and the District of Columbia from 2001 to 2013. Our results suggest that restricting hard liquor and wine sales to liquor stores has no impact on employment, number of establishments or total wages in the liquor store sector. However, restricting the sale of hard liquor, wine and beer to liquor stores has a positive effect on employment, wages, and number of establishments in the liquor store sector. Results in the grocery store sector are sensitive to specification, however, there is no strong evidence that retail restrictions have a corresponding negative effect on the grocery and convenience store sectors. These results contribute to the ongoing policy debates regarding the liberalization of state alcohol retail laws by empirically testing a number of the hypotheses put forth by proponents and opponents of the liberalization debate.

Suggested Citation

  • Byrne, Paul & Nizovtsev, Dmitri, 2017. "Exploring the effects of state differences in alcohol retail restrictions," International Review of Law and Economics, Elsevier, vol. 50(C), pages 15-24.
    • Handle: RePEc:eee:irlaec:v:50:y:2017:i:c:p:15-24
    DOI: 10.1016/j.irle.2017.04.001
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    More about this item

    Keywords

    Alcohol; State regulation; Retail sector; Liquor stores; Grocery stores;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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