State alcohol policies, teen drinking and traffic fatalities

This empirical study evaluates the policy responsiveness of teen drinking i n models that can condition on the unobserved state-specific attributes tha t may have biased conventional evaluations. The results demonstrate that cr oss-state heterogeneity can be important and that beer taxes have relativel y small and statistically insignificant effects on teen drinking. Models of youth traffic fatalities also indicate that the conventional beer tax elas ticities are not robust to additional controls for omitted variables. The i mportance of these omitted variables is illustrated by a counterfactual whi ch compares models of nighttime fatalities to those that occur in the dayti me when the rate of alcohol involvement is substantially lower. (C) 1999 El sevier Science S.A. All rights reserved.