Alcohol Availability and Crime: Evidence from Census Tract Data.

• Author: Gyimah-Brempong, Kwabena

Kwabena Gyimah-Brempong [*]

Using census tract data from the city of Detroit and a reduced-form crime equation, this article finds that alcohol availability is positively and significantly related to total, property, and violent crime rates and homicides. The elasticity of crime rates with respect to alcohol availability calculated in this study are 0.92, 0.82, 0.87, and 0.12 for total crime, violent crime, property crime, and homicide, respectively. These elasticities do not change qualitatively across estimation methods for the various measures of crime rates. I find that ordinary least squares estimates impart a downward bias to the effects alcohol availability has on crime rates. Failure to account for the endogeneity of alcohol outlets will therefore result in an underestimate of crime elasticities with respect to alcohol availability. The estimates imply that reducing alcohol availability may decrease crime rates and improve social welfare.

1. Introduction

   This article uses census tract data from the city of Detroit and a reduced-form crime equation to investigate the effects of alcohol availability on crime. A fact of urban life in the United States is high crime rates, rates that differ across neighborhoods in cities and easy availability of alcohol. A disproportionately large number of crimes are committed by people who have just consumed alcohol (Cook and Moore 1993a). The homicide rate among youths in poor inner cities, where alcohol consumption tends to be high, is four times as high as the national average among all youths (FBI 1996). Parker (1993) reports that, all things equal, homicides are higher in high alcohol consumption neighborhoods than in low alcohol consumption neighborhoods. According to the National Institute of Criminal Justice statistics, 40% of all violent crime victimization, 40% of all fatal motor vehicle accidents, and 67% of all domestic violence in 1995 were alcohol related. In addition, 40% of all violent offenders in jail reporte d using alcohol just before committing the crime (Greenfeld 1998). Similarly, a disproportionately large share of crimes in the United Kingdom occurs in or near pubs during peak hours of operation (Hutchinson, Henderson, and Davis 1995). Besides being perpetrators, a large number of victims of crime had used alcohol at the time of their victimization. In this study, I use the term commission of crime more broadly to include perpetrators as well as the victims of crime.

   In spite of these statistics, easy availability of alcohol and its use continue to be part of the American culture. A Harris poll reports that 38% of adult males think they drink too much but will not change their behavior and 28% of high school students think that adults should be able to drink all the alcohol they want (FBI 1996). However, a recent study conducted by the University of Michigan for the National Institute of Drug Abuse found that over 80% of Americans disapprove of youth drinking (University of Michigan Institute for Social Research 1998). In spite of these statistics linking alcohol to crime, with the exception of the relationship between alcohol control policy and drunk driving, economists have not investigated the effects of alcohol availability on crime rates generally.

   Given the high correlation between alcohol availability and crime, DiIulio (1995) suggests using zoning laws to decrease alcohol availability as a means of decreasing crime. It is not clear whether there is a causal relationship between alcohol availability and crime rates. Does alcohol availability increase crime? If increased alcohol availability leads to increased crime, what is the mechanism through which alcohol availability affects crime? While answers to these questions may be important for policy formulation and implementation, my concern is with the investigation of the effects of alcohol availability on crime rates. If alcohol availability increases crime rates, it may be possible to formulate alcohol control policies that also depress crime. While there are few theoretical models that link alcohol availability to specific crimes, empirical studies of the effects of geographical availability of alcohol on crime rates generally are few and far between in the economics literature. More empirical studi es could help establish the link that has been made between alcohol control policies and crime.

   Results of studies investigating the connection between alcohol availability and crime have implications for further research and policy. For example, if alcohol availability increases crime rates, then decreasing alcohol availability may decrease crime and improve social welfare. If there is a positive link between alcohol availability and crime rates, then alcohol availability should be included in the supply of offense equation as an added explanatory variable. There is, therefore, the need to better understand the relationship between the geographical availability of alcohol and crime rates in the economics of crime literature. This article attempts to contribute to the literature on the effects of alcohol availability on crime rates by linking the availability of alcohol directly to crime rates instead of looking at the relationship between alcohol control policies and crime. To the extent that alcohol control policies affect the availability of alcohol, this article is in the same vein as those that inv estigate the effects of alcohol control policies on some crimes.

   Criminologists and sociologists find a positive correlation between alcohol and crime (Homel, Tomsen, and Thommeny 1992; Stitt and Giacopassi 1992; Parker 1993, 1995; Van Oers and Garretsen 1993; Blount et al. 1994; Scribner, MacKinnnon, and Dwyer 1995; Valdez et al. 1995; Roizen 1997; Parker and Cartmill 1998; Scribner et al. 1999). Some researchers argue that alcohol affects criminal behavior in a pharmacophysiological way by either impairing reasoning or reducing inhibition (Lang and Sibrel 1989; Sprunt et al. 1994) after consumption. In effect, alcohol acts as a catalyst rather than as the cause of crime. Other researchers argue that alcohol use is related to crime because of the need to obtain resources to purchase alcohol (Rush, Glickman, and Brook 1986). A third group argue that drinking per se does not result in crime; it is rather the environment in which drinking takes place that encourages criminal behavior (Homel, Tomsen, and Thommeny 1992). Gruenewald, Madden, and Janes (1992) and Gruenewald, Pon ick, and Holder (1992) use state data to investigate the effects of alcohol outlet density on alcohol consumption and find a significantly positive correlation between density and consumption after controlling for the endogeneity of density. They did not, however, investigate the effects of alcohol outlet density on crime. Second, they provide no detailed economic rationale for the hypothesized endogeneity of alcohol availability.

   Economists mostly investigate the relationship between alcohol pricing, regulation, and drunk driving and have not generally investigated the relationship between alcohol availability and other crimes. There are, however, a few exceptions. Using census tract data from Milwaukee, Wisconsin, DiIulio (1995) finds that alcoholic outlet density has a positive impact on all indices of crime after controlling for socioeconomic characteristics of communities. Brown, Jewell, and Richer (1996) find that alcohol control policies decrease alcohol-related motor vehicle fatalities in Texas counties. Chaloupka and Weschler (1996) find that lower alcohol prices and availability are positively correlated with binge drinking and crimes among U.S. college students. Further, they find that crime rates are substantially higher when alcohol is available on campus than when it is not. In two recent articles, Markowitz and Grossman (1998a, b) investigate the effects of state alcohol control policies on child abuse in the United Sta tes. Using state beer taxes and prohibition of billboard advertising of alcohol as their measures of alcohol control policies, they find a negative and significant relationship between state alcohol control policies and child abuse. Saffer and Chaloupka (1995) find that decriminalization of marijuana increases marijuana consumption by 4-6%. If a given proportion of those who consume drugs (including alcohol) commit crime or become victims of crime, then increased consumption of the drug due to increased availability may increase crime rates. Cook and Moore (1993b), using pooled time series and cross-section data, find that alcohol availability increases alcohol consumption, which in turn increases violence in the United States.

   Most of the studies reviewed above use either statewide or countywide data to investigate the relationship between alcohol availability and crime. The use of data from large geographical areas such as a state or county implies that one may not be able to control for many environmental variables that affect crime. For example, outlet density, defined as the concentration of alcohol outlets in a geographical area, measured at the state level may have different crime implications in a densely populated urban area in the state than in a sparsely populated rural part of the state. It is also well known that the distribution of alcohol outlets is not uniform within a state or a city. Within a city, alcohol outlets tend to be concentrated in a few neighborhoods. Citywide alcohol outlet density will not capture these neighborhood differences. By using census tract data from a large city, I hope to minimize the influence of such intervening variables. [1] The use of the census tract as the unit of analysis is similar to the approach adopted by Scribner et al. (1999). While studies investigating the connection between alcohol and crime assume that alcohol availability is exogenous, I test for its exogeneity in this study. I find it endogenous and treat it as such...