Michigan Needs Different Tack on
Alcohol Control

Economists warn us to evaluate public policies according to their results, not their intentions. Virtually no one will argue with the stated intentions behind alcohol-control policies — principal among them, to reduce alcohol-related fatalities and to keep alcohol out of the hands of minors.

A look at the data, however, shows that Michigan’s current alcohol-control policies are not delivering results. The benefit of allowing individual states to decide whether and how to regulate alcohol markets is that we have a slate of 50 experiments. By comparing states that heavily regulate alcohol markets to those that don’t, we can see how well alcohol-control policies work.

Numerous studies, most recently one by the Mackinac Center for Public Policy, have shown that alcohol-attributable death rates are not lower in states that more heavily regulate their alcohol markets. According to Center research, average alcohol-attributable fatality rates are actually lower for states that license private firms to manufacture and sell alcohol than for states like Michigan that maintain state-run wholesale liquor monopolies.

Comparing DUI fatalities across states is complicated by the fact that differences in the number of miles that people drive, weather conditions, road quality and traffic congestion contribute to differences in fatality rates. But, because these factors affect all traffic fatalities — regardless of whether or not alcohol is involved — the right way to measure DUI fatalities is as a percentage of all traffic fatalities. Data from the National Highway Traffic Safety Administration provide a telling comparison.

Among states that control alcohol markets most heavily, 33 percent of traffic fatalities are alcohol-related. Among states that license private firms to manufacture and sell alcohol, 33 percent of traffic fatalities are alcohol-related. The figures are the same for states that mix partial control with partial private licensing.  

Alcohol doesn’t just contribute to traffic deaths. Alcohol also contributes to deaths from liver disease, fetal alcohol syndrome, alcohol poisoning, aspiration, and numerous other acute and chronic causes. According to data from the Centers for Disease Control, states that impose the heaviest controls on alcohol markets experience 5.8 alcohol-related deaths per 100,000 people annually, while states with the least restrictions experience 5.5 alcohol-related deaths per 100,000 people. Similarly, previous studies have found no difference in the rates of underage drinking or underage binge drinking between the most heavily and least heavily controlled states.

In the face of this data, alcohol control proponents argue for maintaining the status quo because “it is better to be safe than sorry.” At a minimum, they argue, heavy controls limit the number of alcohol sellers, whereas they claim a free market would put a liquor store on every corner.

The data show that this claim is also false. States that control their alcohol markets actually have more off-premise alcohol establishments than do states without alcohol controls (14.5 vs. 9.9 per 10,000 adults). States with alcohol controls also have more on-premise alcohol establishments than do states without alcohol controls (16.0 vs. 14.1 per 10,000 adults). In other words, on a per-capita basis, the free market actually places fewer alcohol sellers on the streets than do state-run alcohol monopolies.

Looking at the entire body of research on alcohol controls, one clear theme emerges: There is no consistent or compelling evidence that state-run alcohol monopolies reduce alcohol-related fatalities, prevent underage drinking or limit retail outlets. There is repeated evidence that state-run monopolies actually do the reverse. Everyone concerned with policy realities rather than policy intentions should take note.

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Antony Davies is an associate professor of economics at Duquesne University and co-author of the recent Mackinac Center study “Alcohol Control Reform and Public Health and Safety.” The Mackinac Center for Public Policy is a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.