Cut Drunk Driving By Taxing Liquor Ads
FOR decades, the liquor industry has maintained that its heavy spending on advertising and promotion is intended to shift consumers of spirits, beer, and wine from one brand to another - not to boost alcohol consumption or attract new drinkers.
Economists, looking at national figures on advertising and consumption, have not been able to prove otherwise - until now.
Utilizing a different set of data, Henry Saffer, a research associate at the National Bureau of Economic Research (NBER) in New York, has found that advertising does boost consumption. Therefore, it adds to drunk-driving deaths.
Banning ads for beer and wine on television and radio, Mr. Saffer calculates, would save about 2,000 lives a year in the United States. Alternatively, a law eliminating the tax deductibility of ad expenses for makers of alcoholic beverages would raise government revenues by $300 million a year and reduce advertising sufficiently to prevent about 2,000 deaths, he adds.
The possibility of such measures being approved by legislators may be slim at the moment. After all, last year the Clinton administration rejected the idea of raising liquor taxes as a revenue-boosting portion of its tax package. It did raise tobacco taxes.
Social and legal opposition to smoking is ``way ahead'' of opposition to liquor, Saffer says. ``But the same scenario is unfolding for alcohol. The climate is moving toward changing the social mystique of alcohol from cool and sexy to something more negative, less healthy.''
Saffer accepts the medical view that no amount of smoking is good for an individual, but that a small amount of alcohol is OK. He does drink himself.
Motor vehicle deaths in the US have declined to about 40,000 a year from a peak of 56,300 in 1972. Lower speed limits, seat belts, airbags, and other safety devices in cars have been a major factor in this reduction. Further, alcohol has been involved in fewer fatal accidents. Drinking and driving has been discouraged by tougher laws and penalties, and increased social disapproval.
According to the Highway Traffic Safety Administration, 30 percent of all drivers involved in fatal crashes were found to be drunk in 1982, only 21.9 percent in 1992.
Saffer's study, presented in an NBER paper, was financed by the National Institute on Alcohol Abuse and Alcoholism. The unique characteristic of the study was that he was able to get data on liquor advertising levels for spot TV, spot radio, and outdoors (such as billboards) in the 75 top aggregations of counties (known as Area of Dominate Influence to the TV industry) that correspond roughly to major metropolitan areas. This data was then matched with drunk-driving fatalities in the same areas. Unlike liquor advertising on the networks or syndicated TV, spending varies a great deal at the local level. It also goes up in summer and at the Christmas holiday season when alcohol consumption peaks - along with auto fatalities.
Saffer adjusted the raw ADI data for such factors as the price of alcoholic beverages, the percentage of the population that is black or Hispanic, and the proportion of the population attending such churches as the Mormon Church, Southern Baptist Church, Catholic Church, other Christian denominations, and Jewish services. Some of these churches are more effective than others in encouraging temperance, Saffer says. ``Catholics may drink more,'' he says. Though Southern Baptists specifically discourage alcohol consumption, he says, the prohibition ``may lead to less public drinking and more private drinking, as in cars.''
Saffer estimates that a ban on all liquor advertising and all other forms of promotion would reduce auto fatalities about 10 percent or 4,000 people. Considering the power of the liquor lobby, he considers such a ban unlikely. The liquor industry spends about $1 billion on media advertising and another $1 billion on various other promotions, such as sponsoring sports or cultural events. A ban on advertising in only one media, say TV, would prompt the liquor industry to shift its efforts to other media or promotions and raise constitutional issues, he says.
So Saffer advocates making liquor advertising more expensive to liquor companies by removing its tax deductibility. ``It has fewer pitfalls,'' he says.