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Abstract

Over the past 10 years, five states have proposed to raise the alcohol by volume (ABV) limit on beer being sold to promote the beer brewery industry in their states. An increase in ABV limits increases the variety of beer being sold and may change people’s consumption behavior. Such changes could subsequently influence drinking behaviors as well as driving safety in those states. This paper investigates the relationship between the increase in ABV limits and individual alcohol consumption and alcohol-related fatal crashes. We use difference-in-difference model to analyze the alcohol consumption before and after the rising ABV limit. Our panel data allows us to control for state and time fixed effects, state level economic conditions and beer consumption. We find higher ABV limits lead to a slight increase in alcohol consumption as well as a negative effect on alcohol-related fatality rate.

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