Econ Seminar Essay #4

Econ Seminar Essay #4 - McCallum How Old is Too Young?...

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McCallum How Old is Too Young? Drinking alcohol is fun; it makes you more relaxed, makes situations seem more enjoyable, and makes life easier to deal with, at least for a little while. If everybody could use it responsibly, alcohol consumption wouldn’t be a problem, but that isn’t the case. Alcohol abuse and the decisions made while under its influence are one of mankind’s greatest problems today, as they have been for centuries. Drinking and driving kill thousands each year, and alcohol also contributes to other violent and nonviolent crimes. Alcohol also makes citizens useless and nonproductive while drinking. It’s hard to work well when drunk, and if you happen to become addicted to alcohol, it’s hard to work well anytime. Due to the negative effects of alcohol, the United States government has enacted laws requiring a minimum age for its consumption. Given the serious consequences of alcohol-related actions and the intellectual maturity required to avoid them, this seems logical. However, unlike most other industrialized nations, the United States says you must be 21 to drink instead of 18. This change is relatively recent, as the US experimented with a drinking age of 18 during the 70’s but quickly changed back to 21 a few years later. This new law was put in place for a variety of reasons, including decreasing traffic fatalities, increasing citizen productiveness, and decreasing alcohol abuse. Its effectiveness at achieving these goals is debatable. But why is the MLDA (minimum legal drinking age) important economically? Apart from forcing kids to wait a few more years, it seems that this issue is only important to teenagers looking to have a good time. The answer lies in the realm of economic efficiency and external vs. internal costs and benefits. The consumption of alcohol leads to social effects outside of those making the choices (ex. Society is forced to pay the medical bills of underage drinkers going to the emergency room). It also helps some underage drinkers (those prone to alcohol-
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McCallum related incidents) while harming others (those who can control the habit and enjoy themselves responsibly). This makes alcohol consumption an important economic model to study. However, evaluating both the internal and external effects of alcohol would take much more than five pages. Therefore, we will reduce the scope of an economic model for the drinking age to simply seeing if such a law is cost-effective for the individual. In this case, teens and 18-20 years may not be mentally developed enough to correctly estimate the costs of their decision to drink, and thus the government steps in. This means that the benefits of a MLDA of 21 consist of cutting internal costs for the underage because at that age they are too young to evaluate the costs themselves. Therefore, we will study only internal costs and benefits of drinking in our discussion of the MLDA of 21 vs. a MLDA of 18. If a MLDA of 21 provides more net benefits vs. costs to the individual than a MLDA of 18, we can say that it is more desirable. I don’t
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Econ Seminar Essay #4 - McCallum How Old is Too Young?...

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