Can alcohol price policies be used to reduce drunk driving? Evidence from Canada.

Drunk driving is one of the more serious negative consequences of alcohol consumption. Since consumption of alcohol is sensitive to the price of alcohol, and the occurrence of drunk driving is sensitive to the level of alcohol consumption, the possibility exists for alcohol pricing policies to be used to reduce drunk driving in the population. This paper reviews the evidence on this possibility in the literature and adds results based on data from the Canadian province of Ontario. Multiple regression analysis of time series data for Ontario from 1972 to 1990 indicate that, controlling for income, the proportion of young males in the population, changes in the minimum drinking age, and other confounding variables, increasing the price of alcohol has a significant effect in reducing alcohol-related motor vehicle accidents (elasticity = - 1.2, p < .05) and alcohol-related traffic offenses (elasticity = -0.50, p < .05). Overall, the evidence strongly supports the view that alcohol tax and pricing policies can be used to reduce the extent of drunk driving.