The Relationship of Outlet Densities to Alcohol Consumption: A Time Series Cross-Sectional Analysis

The implementation of regulations on access to alcoholic beverages, whether through beverage taxes or restrictions on the availability of this commodity through alcohol outlets, has often been proposed as a legitimate and politically feasible approach to the prevention of alcohol-related problems. Empirical studies of the effects of these approaches to regulation on alcohol consumption and problems, however, have not been unanimous in their support of these preventive measures. While support exists for the suggestion that increases in alcohol beverage prices reduce consumption and have preventive effects upon the occurrence of problems, relatively little evidence exists for the supposition that the regulation of alcohol availability will have similar preventive effects. The lack of evidence in support of the latter thesis rests primarily upon the difficulty of obtaining sufficient data to examine comprehensive models of access to alcohol.
The current paper analyzes aggregate time series cross-sectional data from states of the U.S. to evaluate the relationships between alcohol beverage prices, availability, and alcohol sales within one analytic model. The model relates beverage prices and alcohol availability directly to alcohol sales in the context of an assumed simultaneous relationship between sales and availability. The results show that, independent of the effects of beverage prices, and controlling for the endogeneity of sales and availability, physical availability of alcohol was directly related to sales of spirits and wine.