Endogenous Drinking Age Laws and Highway Mortality Rates of Young Drivers

Henry Saffer, Michael Grossman

NBER Working Paper No. 1982 (Also Reprint No. r0951)
Issued in July 1986
NBER Program(s):Health Economics, Public Economics

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.

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Document Object Identifier (DOI): 10.3386/w1982

Published: Grossman, Michael and Henry Saffer. "Drinking Age Laws and Highway Mortality Rates: Cause and Effect," Economic Inquiry, Vol. 25, No. 3, July 1987.

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