Wet Laws, Drinking Establishments, and Crime

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 18.03.2015, 12:15 - 13:30

   

Presentation by 

Daniel I. Rees (University of Colorado Denver)
   

Abstract:

Drawing on county-level data from Kansas for the period 1977-2011, we examine whether plausibly exogenous increases in the number of establishments licensed to sell alcohol by the drink are related to crime. During this period, 86 out of 105 counties in Kansas voted to legalize the sale of alcohol to the general public for on-premises consumption. These counties experienced substantial increases in the total number of drinking establishments (e.g., bars and restaurants). Using legalization as an instrument, this study is the first to provide estimates of the elasticity of crime with respect to drinking establishments. Specifically, we show that a 10 percent increase in drinking establishments is associated with a 3 to 4 percent increase in crime. Reduced-form estimates suggest that legalizing the sale of alcohol to the general public for on-premises consumption leads to a 10 to 12 percent increase in crime.

   
   
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