PAM_4380_april_4_2011

# PAM_4380_april_4_2011 - PAM 4380 Effect of Alcohol Tax...

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PAM 4380: 4/ 4 /2011 Effect of Alcohol Tax Increase Wagenaar et al, AJPH, August 2009 Next time: Homework #5 due Wednesday This presentation includes a revised and extended version of the graphs I drew on the board during lecture.

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Chain of Causality Chain of causality: tax ↑ → price ↑ (pass-thru) price ↑ → consumption ↓ (demand curve) consumption ↓ → mortality ↓ (health prod. function) Kenkel (2005) estimated rate of pass-thru Many studies estimate alcohol demand curves Medical/ epidemiologic research estimates health production function Wagenaar et al estimate ‘reduced-form’ Tax ↑→ mortality ↓ Relationship depends on each link in chain of causality
Structural and reduced-form Simple structural model P = a T + other variables D = b P + other variables M = c D + other variables Note: a > 0, b < 0, c > 0 Substitution yields reduced form M = c D + other var = c (b P) + other var = c b (a T) + other var Wagenaar et al estimate reduced-form M = d T + other variables Coefficient on T = combination of parameters of structural model d = c b a If d = 0, could be because c = 0 or b = 0 or a = 0 If d < 0, means c, b, a are all non-zero

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Research Design Time-series quasi-experimental design Before-and-after with untreated control group Diff-in-diff Ot = outcome at time t
Outcomes Alcohol-caused mortality: all deaths from diseases with alcohol-attributable fraction = 1 Alcoholic-liver disease Acute alcohol poisoning, etc. Alcohol-related mortality:

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PAM_4380_april_4_2011 - PAM 4380 Effect of Alcohol Tax...

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