Alcohol Availability and Crime: Evidence from Census Tract Data.

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Alcohol Availability and Crime: Evidence from Census Tract Data.

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 availa...

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