Ruhm (1996) found that for every 1 percent increase in the price of beer, the traffic fatality rate declined by nearly the same proportion. He found nearly identical results using fatalities per total vehicle miles driven. The study also showed that rates for nighttime fatalities and for people aged 18 through 20 were even more responsive to an increase in beer prices. This study, as well as a substantial body of prior research, suggests that a tax increase may be a useful tool to reduce traffic fatalities, particularly among youths and young adults. One recent study, however, has suggested that changes in fatality rates that have been attributed to beer taxes might be linked more strongly with other factors omitted from previous analyses (Dee 1999). Clearly, further research is needed.
