College of Business
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The Mission of the Jake Jabs College of Business & Entrepreneurship (JJCBE) is to provide excellence in undergraduate and select graduate business education.
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Item Alcohol consumption, beverage prices and measurement error(Alcohol Research Documentation, Inc., 2003-03) Young, Douglas J.; Bielinska-Kwapisz, AgnieszkaAlcohol price data collected by the American Chamber of Commerce Researchers Association (ACCRA) have been widely used in studies of alcohol consumption and related behaviors. A number of problems with these data suggest that they contain substantial measurement error, which biases conventional statistical estimators toward a finding of little or no effect of prices on behavior. We test for measurement error, assess the magnitude of the bias and provide an alternative estimator that is likely to be superior. Method: The study utilizes data on per capita alcohol consumption across U.S. states and the years 1982-1997. State and federal alcohol taxes are used as instrumental variables for prices. Results: Formal tests strongly confirm the hypothesis of measurement error. Instrumental variable estimates of the price elasticity of demand range from -0.53 to -1.24. These estimates are substantially larger in absolute value than ordinary least squares estimates, which sometimes are not significantly different from zero or even positive. Conclusions: The ACCRA price data are substantially contaminated with measurement error, but using state and federal taxes as instrumental variables mitigates the problem.Item Alcohol taxes and beverage prices(National Tax Association, 2002-03) Bielinska-Kwapisz, Agnieszka; Young, Douglas J.Alcohol involvement in auto crashes, homicides, and teen drinking is an important policy concern, and the price of alcohol may have significant effects on these behaviors. Are alcohol taxes quickly and fully passed on to consumers? Given the difficulties of accurately measuring beverage prices, are beer taxes a good empirical proxy for the price of alcohol? Using pooled cross section–time series data on state and Federal alcohol taxes and beverage prices, beer taxes are found to be poor predictors of alcohol prices. Controlling for state and period effects, excise taxes appear to be over–shifted: Retail prices rise by more than the amount of the tax, and the rise occurs within 3 months.Item Alcohol prices, consumption and traffic fatalities(Southern Economic Association, 2006) Bielinska-Kwapisz, Agnieszka; Young, Douglas J.We examine the relationships among alcohol prices, consumption, and traffic fatalities using data across U.S. states from 1982 to 2000. Some previous studies have found large, negative associations between alcohol taxes and fatalities. However, commonly used price data suggest little or no connection between alcohol prices and fatalities. These apparently conflicting findings may result from measurement error and/or endogeneity in the price data, which biases ordinary least squares estimators toward a finding of no price effects. Using alcohol taxes as instrumental variables, fatalities are found to be negatively related to prices. In addition, alcohol consumption is strongly positively related to fatalities. However, biases may still remain, because taxes are not entirely suitable as instruments.