reports the relationship between alcohol taxation and drinking during pregnancy. Models in Columns 1–3, which aim to show the direct impact of alcohol taxation on infant health, do not include maternal information. Models in Columns 4–6 include maternal characteristics, demonstrating whether adding mothers’ characteristics and thus demonstrate whether inclusion of maternal variables affects our understanding of the potential impacts of alcohol taxes on women’s behaviors and on subsequent newborn health. If results across models do not vary, the estimation is robust to model specification, meaning that alcohol taxes do impact infant health, even while controlling for mothers’ characteristics. The estimated marginal impacts of taxes on drinking prevalence were negative but statistically insignificant. The probability of binge drinking dropped by 3% points per one-cent increase in beer taxes, 1.5% points for an equivalent increase in wine taxes, and 0.6% points for liquor taxes, and these results do not change across models. These results are statistically significant, which suggests that there exist negative impacts of alcohol taxes on heavy drinking among pregnant women. The coefficient of liquor taxes is small while reasonable since the unit of taxes variables is “cent” (to be consistent across three types of taxes) while the mean of liquor taxes is $15, or 1,500 cents. The effect of taxes on quantity of drinks, however, decreased as more controls were included, implying that quantity of consumption is not fully determined by tax-effect, as mothers’ demographic characteristics also have an effect. Given the low incidence of binge drinking (1%), I have run linear probability and logit models as well. Results from these two estimations are similar to the Probit model presented here, except that clustered standard errors are a little different.
Alcohol Taxes and Drinking while pregnant (BRFSS).
Price elasticity of demand measures the responsiveness of the quantity demanded of a good or service to a change in its price. Following Evans and Ringel [29
], tax elasticity of demand changes on drinking participation is:
. Specifically for this paper,
are average level of taxes and average probability of drinking while pregnant. also presents the tax-induced elasticities of alcohol demand. Per any 1% increase in taxes, the drinking prevalence decreases by 0.1–0.2%, indicating that drinking participation is irresponsive to prices induced by taxes among pregnant women. With the same amount of changes in taxes, the quantity of alcohol consumption decreases by 1.2–1.8%, meaning that quantity of demand is sensitive to alcohol taxes. It is not surprising that the quantity elasticities are larger than participation elasticities, as theory predicts that quantity elasticities encompass both the participation and quantity responses. With this similar logic, tax elasticities of binge drinking are also larger than participation elasticities: the binge drinking decreases by 2.5% with 1% increase in beer or wine taxes, and by 9–10% with liquor taxes. These estimates show that binge drinking is very sensitive to prices among pregnant women, and most sensitive to liquor taxes. Moreover, these elasticities among pregnant women are larger than those in the general population, in which elasticities range from −0.92 to −2.24 [27
There are two ways that alcohol taxes can be seen to impact birth outcomes. One is through their potential effect on the types of women who give birth. Studies have shown a positive association between alcohol use and risky sexual behavior, especially in teenagers [30
]. Therefore, a tax hike may reduce the likelihood of youth engaging in unprotected sexual activities, which delays motherhood. In this study, such impact is examined by characterizing the mothers shown in . The proportion of mothers younger than 24 years decreased by 16% points per one-cent increase in beer taxes, 2% points in wine taxes and 0.01 in liquor taxes. The relative number of mothers between ages 24–35 likewise increased with raises in alcohol taxes. Moreover, any one cent increase in beer taxes decreased the probability of a mother with an education level of high school dropout or lower (i.e.
, years of education smaller or equal to 12) by 29% points, 7% points in wine taxes, and 1% point in liquor taxes. As children born to these mothers are at higher risk for health problems [32
], a decreasing proportion of these women implies better birth outcomes with higher alcohol taxes.
Composition of Mothers (Natality Files).
shows the second type of effect, i.e., alcohol taxes impact average infant health. Mothers’ characteristics are important factors for infant health since results change when models included mothers’ features. On average, a one-cent hike in beer taxes increased the average birth weight with 1grams, 0.2–0.3 grams in wine taxes and 0.07 grams in liquor tax. It is also evident that alcohol taxes lead to a reduction of LBW. The likelihood of LBW decreased with 1~2% per one-cent raise in beer taxes, 0.2–0.3% points in wine taxes and 0.1% points in liquor taxes. Results are all statistically significant, indicating that alcohol taxes have positive impacts on improvement of birth weight or reduction of LBW. Effects of these policies on ELBW and low APGAR scores were also investigated. The incident of ELBW reduced with 0.1–0.3% points per one-cent increase in beer, wine or liquor taxes. The estimation on low APGAR scores is not inclusive. Increases in beer or wine taxes raised the incidences of low APGAR scores by a small amount. While there is no obvious explanation for this finding, one possible reason is that infants with a low APGAR score may be dead and were not included in birth certificate data. Another possible reason may be the low average prevalence of low APGAR scores (1% overall, as shown in ).
Alcohol Taxes and Infants Health (Natality Files).