[Philip Cook, guest-blogging, January 9, 2009 at 7:20am] Trackbacks
Last Call:

I've decided that my final guest blog will be a response to some of the posted comments, rather than a new essay.

Thanks to those of you who took the time to read some of my posts, and to keep a cordial tone in your comments. I learned something from reading them, especially about home brewing!

A few of you were interested in knowing more, or having a cite to back up a factual claim. Of course I hope you will consult my book, Paying the Tab. It is quite thorough in presenting the arguments and evidence.

Several comments suggested that I didn't know the difference between correlation and causation. Actually I believe that I do know the difference. My technical contributions to the alcohol literature have focused on taking advantage of natural experiments to learn the effects of changes in policy. The book explains this matter is detail. It also discusses the evidence on minimum drinking age, discussing two of the issues raised by bloggers -- the state border effects and the effect on the older age group.

I was baffled by comments to the effect that I believe all drinking is bad. My friends would be amused, and it's surely not what I said in my blogs. Like every other commodity, alcohol has benefits and also costs. The difference for alcoholic beverages is that the costs are not fully reflected in the price. A higher excise tax would help with that problem.

(One great virtue of the price system in a private enterprise economy is that the prices signal relative scarcity and provide an incentive to economize appropriately. But when there are externalities -- when property rights are incomplete -- the price system does not do those jobs very well without some intervention.)

There were many comments to the effect that taxes designed to change behavior in particular ways are fascist or at least represent an unacceptable imposition on freedom and are certainly no business of government. For what it's worth, I see alcohol excise taxes as less of an imposition on personal freedom than many other types of alcohol regulations that are intended to limit abuse, including the high minimum age.

A number of comments appeared to take me seriously when I listed some of the options for regulating adverse consequences of drinking -- including penalizing DUI more severely etc. The purpose of that paragraph in my third post was not to advocate any of those changes (far from it) but rather to point out that a much-touted alternative strategy to tax increases -- penalizing the consequences of abuse -- can be costly and oppressive.

Several comments noted that there is evidence that moderate drinking promotes health. So there is. But the main epidemiological evidence is correlational, and very flimsy. Similar evidence has been profoundly misleading in other medical areas, such as hormone replacement therapy.

We'll probably never do a randomized controlled trial with drinking, and without that it will be very difficult to sort out the causal effects of drinking. Incidentally, just as it is true that moderate drinkers live longer than abstainers, it is also true that moderate drinkers are paid more than abstainers. One speculation (by one of my former students) is that that association is causal, the result of social capital. That's an interesting idea, but I don't believe it.

The statistical-inference problem is that people who abstain are different in all kinds of ways (some not readily observable) from those who drink. Differences in longevity and earnings may be the result of those other characteristics, rather than the drinking per se. My advice: Don't start drinking just because you want a raise in salary or cleaner arteries.

(I've read that pipe smokers live longer than nonsmokers on averageā€¦)