Laixuthai and Chaloupka (1993) attributed this change in the price sensitivity of youth drinking to the change in the full price of drinking resulting from the higher MLDAs in 1989. For a youth, the full price of consuming alcohol can be thought of as the monetary price of alcohol plus the indirect costs of illegal drinking. These indirect costs include such legal obstacles as the MLDA, the time spent obtaining alcohol, and the money and time spent obtaining false identification. When the average MLDA and, consequently, the associated indirect costs of alcohol, are relatively low (as in the 1982 sample), a given increase in alcohol taxes will have a relatively large impact on the full price of alcohol and thus on consumption. Conversely, when the average MLDA and the associated indirect costs of alcohol are high (as in the 1989 sample), a similar increase in alcohol taxes will have a relatively small impact on the full price of alcohol and on consumption. Accordingly, high school seniors in 1989, who faced higher indirect costs of obtaining alcohol than their 1982 counterparts, responded less to changes in the monetary costs.
