Thursday, August 18, 2016

What Should The Driving Age Be?

One thing that Twenty-One Debunked has been slacking on lately is the other main age limit in the drinking/driving equation--the driving age.  While we have not always been very clear on that particular issue and generally left it on the back burner, it merits attention nonetheless.

There is indeed an interesting paradox compared with the drinking age.  With the notable exceptions of Canada (driving age 14, 15, or 16 depending on province), Australia (16 1/2 in one state, 17 or 18 in the rest), and New Zealand (16), every other industrialized (and semi-industrialized) nation on Earth has a driver license age of 17 or higher, and most are 18.  Yet these countries all have drinking ages lower than the USA, and nearly all of them are 18 or lower.  Many are as low as 16 (though a few European nations have recently raised the drinking age to 18). And most of these countries have far lower rates of traffic deaths, alcohol-related or otherwise, than the USA.

On the surface, that strongly recommends in favor of raising the driving age in conjunction with lowering the drinking age, particularly setting the driving age higher than the drinking age instead of the other way around.  At one time, the founder of Twenty-One Debunked advocated doing exactly that.  But such an approach glosses over some serious issues involving the car culture of the USA.  First, with our inferior public transportation infrastructure, we cannot compare the situation here to Europe.  Canada or Australia would be a much better comparison.  Secondly, the odds of us ever lowering the drinking age below 18 are slim to none, and we no longer consider such a goal worthwhile.  But most importantly, the evidence that a much higher driving age would make roads any safer is questionable at best.

Renowned sociologist and youth-rights activist Mike Males did a famous study in 2006 that found that California's tough new graduated driver license (GDL) law implemented in 1996 did reduce traffic deaths among 16-17 year olds--but also increased traffic deaths for 18-19 year olds enough to more than offset the apparent lifesaving effect among younger drivers.  In other words, it merely delayed such deaths, or worse, led to a net increase.  He also found in another study that much of the increased risk among younger drivers is actually the result of poverty, not "immaturity" or "underdeveloped brains".  The rest can largely be chalked up to inexperience, and the difference between genders (males being worse) dwarfs any unaccounted for age difference.  While his research was seen as controversial among the establishment and many disputed it, it nonetheless pans out rather well.  A 2011 national study by Masten et al. confirms Mike Males' general findings: after adjusting for potential confounders, stronger GDL laws (compared with weaker ones) were associated with lower fatalities for 16 year olds but higher fatalities for 18 year olds (and possibly 19 year olds as well), and the net effect for 16-19 year olds as a whole was not significantly different from the null.  In other words, it was a wash overall.

Of course, it is true that 16 year old first-year drivers do have significantly higher fatal crash risks that 17 year old first-year drivers--though 17 year old novices are apparently no worse than 18 or 19 year old novices.  (There are apparently not enough first-year drivers 20 and older to make a valid comparison for them, but I imagine it would be similar.)  Thus, it is possible that raising the driving age to 17 would in fact result in a net reduction in traffic deaths over the lifecycle compared with the status quo, while raising it to 18 or higher would likely only delay deaths compared with a driving age of 17.  New Jersey, for example, has a driving age of 16 for permit and 17 for license--the highest in the nation besides NYC with a de facto age of 18--and their teen traffic death rates are, contrary to stereotypes, lower than neighboring states (interestingly even before their GDL law was implemented, and declined further after that).  Compared with Connecticut, New Jersey's fatality rate was much lower for 16 year olds, slightly higher for 17 year olds, and slightly lower for 18 year olds, so the net effect was death reduction.  So being a year behind may not necessarily negate the benefits of delaying entry to licensed driving--though raising the age any higher than that might. 

So what should the driving age be in the USA?  The optimal age may in fact vary depending on how rural or urban a state or region is, but we do not believe it should be any higher than 16 for permit and 17 for license.  And of course we believe that the drinking age should be 18.  Additionally, we should definitely make the road test tougher like it is in other countries, and improve our driver education courses as well.  Raising the alcohol taxes and the gas tax would likely save many lives as well.  But on balance, raising the driving age any higher than 17 in this country would likely do more harm than good. And while GDLs in general are likely beneficial on balance, there is likely such a thing as too strict--particularly when it only targets drivers below a certain age (as opposed to all new drivers like in many other countries like Canada), and such a poorly designed one can actually backfire.

Saturday, August 13, 2016

What Would The Optimal Vice-Tax Policy Be?

Ever since the invention of taxation thousands of years ago, there has always been much controversy about it.  One of the oldest (if not the oldest) types of tax is the excise tax, which is an indirect tax on specific goods and services.  Common examples in the USA and most other countries include taxes on things like alcohol, tobacco, and gasoline/diesel fuels.  Though originally intended primarily to raise revenue, and highly effective in that regard, such taxes can also have a Pigouvian logic to them:  they help offset negative "externalities" related to the consumption of such goods/services, and also help to reduce such consumption and externalities as well.  Of course, such reasoning only adds to the controversy surrounding the idea.

We at Twenty-One Debunked believe that such taxes are a good idea on balance, and are infinitely preferable to prohibition, including "selective prohibition" for young adults under 21.  We have noted in several previous posts how such taxes are far more efficient than the blunt sledgehammer of prohibition, not to mention cost-effective as well.  In most cases, the taxes already exist and it is simply a question of raising and/or tweaking them, they raise revenue rather than cost it, and they don't violate anyone's civil rights either.

After reviewing the literature and thinking very hard about it, Twenty-One Debunked has come up with the following recommendations about various vice and fuel taxes.

Alcohol
  • Raise and equalize the federal taxes on beer, wine, and distilled spirits to the real (inflation-adjusted) 1991 level for spirits:  $24/proof-gallon in 2016 dollars.  (Note how it's proportional to alcohol content)
  • Beer of 6% ABV or less should be allowed to treated as a flat 5% ABV per barrel for tax purposes.
  • Microbrewers should be exempt from any such tax hikes, at least on the first two million barrels per year.
  • Adjust all taxes for inflation annually from now on.  Fix it, and forget it.
Tobacco 
  • States with cigarette taxes less than $1.00/pack should raise them to between $1.00-$2.00.
  • States with cigarette taxes greater than $2.00/pack should cut them to between $1.00-$2.00.
  • Don't raise the federal cigarette tax any further, except to keep pace with inflation.
  • All taxes on tobacco products should be equalized across types of tobacco products, and collected at the producer rather than the retail level.
  • Adjust all taxes for inflation annually from now on.  Fix it, and forget it.
Cannabis
  • Legalize and tax recreational cannabis at a rate of $10-50/ounce on average, adjusting it up or down proportional THC content.
  • Collect such taxes at the producer level rather than the retail level.
  • Medical cannabis should be exempt from such taxation.
Fuel
  • Raise the federal gas tax (and diesel tax) by a penny per week until it is $0.50/gallon higher than now.  (Or $1.00/gallon higher than the status quo if we remain without a carbon tax-and-dividend).
  • Call it "A Penny for Progress".
  • Give a modest "prebate" to all licensed and registered vehicle owners over the age of 21 (or 25).
  • Adjust it for inflation annually from now on.  Fix it, and forget it.
Road Tax 
  •  As more and more electric and alternative-fuel vehicles replace gas and diesel ones, a new source of highway infrastructure funding will be necessary.
  • Pro-rate vehicle registration fees (road tax) by the number of miles traveled in the past year.  Record odometer readings at each annual safety inspection, and adjust registration fees up or down accordingly.
So what are we waiting for?

Friday, August 5, 2016

Gas Prices Down, Traffic Deaths Up in 2015

While cheaper gas is generally good for the economy and the average person's wallet, unfortunately it also seems to come at a fairly high cost:  more traffic fatalities.  The latest data suggest that was the case in 2015.  After stubbornly hovering between $3.50 and $4.00/gallon from 2011-2014, gas prices on average plummeted to around $2.00 from the second half of 2014 into 2015, and even dropped below $2.00 in early 2016--a seven-year low.  And traffic deaths apparently rose to a seven-year high in 2015, nearly 8% higher than the previous record-low reached in 2014.  Additionally, preliminary data for the first half of 2016 in several states also show that traffic deaths are likely to be the same or higher than they were in 2015.

None of this should really come as a surprise.   As we have noted in a previous post in 2010, it has been known for quite some time now that there is a significant inverse correlation between gas prices and traffic crashes, including fatal ones.  And the link is especially true for younger drivers.  Carefully controlled studies have found this to be true, suggesting a true causal relationship.  Contrary to popular opinion, the price elasticity of gasoline is not zero, or even close to zero, and it seems to rise dramatically when prices go above $3.00/gallon.  Longer-term elasticities are about twice as strong, suggesting the effect builds over time.

The effects on fatalities are not limited to reduced vehicle miles traveled; while that drops too, even controlling for this we can see a decrease in deaths with higher prices.   "Discretionary" driving declines the most when gas prices rise, and most fatalities occur from this type of driving.  Speeding and aggressive driving also decline in an effort to save fuel and money.  Thus, the price elasticity for gasoline demand actually understates the effect on fatalities.  And while non-alcohol related crashes may be more affected by changes in gas prices, alcohol-related ones would be affected as well.

By that logic, it seems that one of the best ways we can reduce traffic fatalities (both alcohol and non-alcohol) would be to raise the gas tax.  Of course, that would make a lot of people mad.  But if it saves even one life, it's worth it, right?  Isn't that what groups like MADD have said about things like the 21 drinking age?  Judging by the lack of enthusiasm about raising the gas tax, it appears that the pro-21 crowd doesn't practice what they preach.  Or maybe it's all about liberty for "just us," not all.

If we know higher gas prices save lives, not to mention the planet, what are we waiting for?

Saturday, July 30, 2016

The Evidence Is Clear: Taxation Works Better Than Prohibition

I've said it before, and I'll say it again:  I believe that alcohol taxes should be raised significantly, and the drinking age lowered to 18.   The overwhelming weight of available evidence strongly suggests that alcohol taxes are far more effective, cost-effective, and socially efficient in reducing alcohol-related problems than the 21 drinking age can ever be.  And in the past few years we have even more evidence to show for it.

I have noted in the past that the landmark Miron and Tetelbaum study of 2009 has not only thoroughly debunked the idea that the 21 drinking age saves lives, but it also had a more subtle finding as well.  Namely, it also quietly confirmed the long-accepted finding that raising the beer tax actually does save lives, even if modestly.  And ironically, that was found when they tweaked the pro-21 Dee (1999) study that at first seemed to cast doubt on the beer tax--adding Alaska, Hawaii, and DC as well as more years to the model completely reversed Dee's original findings in that regard, as the original model apparently didn't have enough useful variation or statistical power to detect such results when state-specific trends were added to the regression.

Also, Ponicki et al. (2007) found that while there is supposedly a modest lifesaving effect of the 21 drinking age, high enough beer taxes can actually make that effect irrelevant as the two policies apparently act at cross-purposes.  When one is increased, the other becomes less relevant as a result, for obvious reasons.

Fast forward to newer studies on the effects of alcohol taxation and pricing.  Even pro-21 researcher Alexander Wagenaar appears to be a huge fan of raising alcohol taxes these days.  In 2009 and 2010, Wagenaar did two large meta-analyses on the effects of alcohol taxation on drinking as well as alcohol-related mortality and morbidity, respectively.  In both, the effects were clear:  it is quite effective indeed as a public health measure.  When alcohol taxes/prices go up, problems and deaths go down.  More recent studies also confirm such results as well.  No wonder Mark Kleiman famously said that, "Any sentence about drug policy that doesn't end with "raise alcohol taxes" is an incoherent sentence".

Thus, raising the alcohol taxes, even doubling or tripling them, should be a no-brainer.  So why aren't we doing it?   Clearly, the alcohol industry opposes any attempt to raise such taxes, and they always threaten a loss of jobs if they pass.  But there is really not much if any evidence that such a thing happens, and the industry consistently fails to produce any robust evidence in that regard.  As for the idea that alcohol taxes are regressive and hurt poorer folks and "responsible" drinkers, that is also not really true either:  the economic burden would fall mostly on heavier drinkers and wealthier folks, while moderate drinkers really wouldn't pay very much.  While I do not advocate extremely high taxes like they have in the Scandinavian countries, there is really no good reason not to raise and equalize all alcohol taxes back to at least the 1991 level for distilled spirits, adjust it for alcohol content, and index it for inflation from then on. Microbrewers, on the other hand, should be exempt from any tax hikes.

It is true that Thomas Jefferson said, "No nation is drunken where wine is cheap".  But that was then.  Nowadays, beer, wine, and even hard liquor have apparently become too cheap for our own good.  And far cheaper than back then or even a few decades ago, at least relative to most people's incomes.  Yet the social costs of excessive drinking have not gone down much, so there is a problem of increasing "externalities".  And unlike most policy measures, raising alcohol taxes would also raise revenue rather than cost it, and there would be no loss of individual rights either.  Clearly, it's a win-win-win situation for everyone except the heaviest drinkers and the merchants of death that profit from them (along with funeral directors, of course). 

For once, MADD is correct about something:  if it saves even one life, it's worth it.  I guess even a stopped clock is right twice a day.