April 20, 2015

Can Raising Taxes on Alcohol Reduce Drunk Driving Accidents?

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A new study published in the American Journal of Public Health suggests that raising the taxes on alcohol could reduce the number of drunk driving related collisions.

Researchers from the University of Florida studied the results of a 2009 tax increase on alcohol in the state of Illinois. In that year, the state increased its excise tax on beer by 4.6 cents a gallon, on wine by 66 cents a gallon and on distilled spirits by $4.05 a gallon, or by 1 cent more that consumers pay per glass of beer or wine and nearly 5 cents more for a serving of spirits.

According to the researchers, alcohol-related traffic deaths in Illinois fell 26 percent. The decrease was higher among young people, at 37 percent. Fatal crashes involving alcohol-impaired and extremely drunk drivers fell 22 percent and 25 percent, respectively.

"Similar alcohol tax increases implemented across the country could prevent thousands of deaths from car crashes each year," Alexander Wagenaar, a professor in the Department of Health Outcomes and Policy at the University of Florida, said in a university news release. "If policymakers are looking to address dangerous drivers on our roads and reduce the number of fatalities, they should reverse the trend of allowing inflation to erode alcohol taxes.”

Wagenaar’s comments reflect the study’s observation that alcohol has become less expensive in recent years as the result of a decrease in alcohol tax rates. The study notes that having 10 or more drinks a day would have costs the average person approximately half of their disposable income in 1950. Modernly, however, having 10 or more drinks a day would cost the average person about three percent of their disposable income.

"This goes against the conventional wisdom of many economists, who assert that heavy drinkers are less responsive to tax changes, and has powerful implications for how we can keep our communities safer," said Wagenaar.

As with many studies, you have to ask yourself, “Is this a true cause and effect situation?”

U.S. News reported that David Ozgo, vice president for economic and strategic analysis for the Distilled Spirits Council of the United States, had the same question. According to Ozgo, fatal collisions involving alcohol were decreasing before the tax increase.

 “In fact, the largest annual decline over the last eight years occurred in 2008, the year before the tax rate changed,” he said. “Importantly, Illinois alcohol-related traffic fatalities declined faster than the national average before the tax increase and this has not been the case since the tax increase.”

Ozgo’s observation makes us wonder whether it really is the tax that is causing the decrease in DUI related fatalities in the state.

Think about the averages alcohol abuser. Is the rather trivial increase in alcohol taxes mentioned above really going to stop someone from purchasing the alcohol? Is it going to keep them from driving after drinking?

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The acronyms DUI, DWI, OMVI and OVI all refer to the same thing: operating a vehicle under the influence of alcohol or drugs. The most commonly used terms are DUI, an acronym for Driving Under the Influence, and DWI, an acronym for Driving While Impaired.
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