Alcohol Consumption: Why do you do it? Anna Kheyfets Guillermo Morini Drew Vinson Econ 120:Statistics Professor Yoon 5 May 2009

Introduction  Research Question What variables affect alcohol consumption? What variables affect alcohol consumption?  Relevance Alcohol might lead to substance abuse Alcohol might lead to substance abuse Risk to human health ≈ 4% disease worldwide Risk to human health ≈ 4% disease worldwide College students want to drink legally College students want to drink legally

Alcohol Consumption Worldwide Burden of Disease from Alcohol

Variables Tested  ŷ = Alcohol consumption (L of pure alcohol/capita) among adults (15 years)  X 1 = Minimum Legal Drinking Age  X 2 = Government Education Expenditures (% of GDP)  X 3 = GDP per capita ($1000)  X 4 = Unemployment Rate (%)  X 5 = Global Peace Index (Score)  X 6 = Inflation rate (%)  X 7 = Homicide Rate (per 100,000)  n = 65 countries

Predictions  Positively correlated with alcohol consumption Unemployment Rate Unemployment Rate Inflation Rate Inflation Rate GDP per capita GDP per capita Homicide Rate Homicide Rate  Negatively correlated with alcohol consumption Minimum Legal Drinking Age Minimum Legal Drinking Age Global Peace Index Global Peace Index Government Education Expenditures Government Education Expenditures

X 1 = Minimum Legal Drinking Age 18 or 21 ?

 The mission of MADD is to stop drunk driving stop drunk driving support the victims of this violent crime support the victims of this violent crime prevent underage drinking prevent underage drinking  MADD supports the 21 Legal Drinking Age Since the 21 Minimum Legal Drinking Age law was enacted in 1984, an estimated 25,000 lives have been saved.

Amethyst  Movement of US college presidents calling for the reconsideration of US drinking age laws  Current signatory count: 135 Signed by President David Oxtoby, Pomona College Signed by President David Oxtoby, Pomona College “Alcohol education that mandates abstinence as the only legal option has not resulted in significant constructive behavioral change among our students”

Pros of 21 Law  The 21 Law Saves Lives Has saved 25,000+ since enacted Has saved 25,000+ since enacted Saves 1,000 lives a year Saves 1,000 lives a year Halved the rate of drunk driving deaths since 1980s Halved the rate of drunk driving deaths since 1980s Decreases overall underage drinking Decreases overall underage drinking

Amethyst vs. MADD  The studies of lives saved quoted by MADD, do not focus on people under 21 Lives saved between are diluted by the fatalities in the group Lives saved between are diluted by the fatalities in the group  Alcohol-related traffic fatalities declined ( ) United Kingdom: 50% declineUnited Kingdom: 50% decline Germany: 37% declineGermany: 37% decline Australia:32% declineAustralia:32% decline The Netherlands:28% declineThe Netherlands:28% decline Canada: 28% declineCanada: 28% decline United States: 26% declineUnited States: 26% decline All countries except for US: min drinking age = 18 yrs. All countries except for US: min drinking age = 18 yrs.  Factors other than drinking age are involved

Validity of Model Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations65 ANOVA dfSSMSFSignificance F Regression E-05 Residual Total F- Stat H 0 : β 1 = β 2 = β 3 = β 4 = β 5 = β 6 = β 7 = 0 H 1 : at least one of β s ≠ 0 REJECT H 0

Coefficients Standard Errort StatP-value Intercept Min Legal Drinking Age Education Expenditures GDP per capita ($1000) Unemployment Rate (%) Global Peace Index Inflation Rate (%) Homicide Rate (per 100) Significant Variables

Regression Model VarbStatisticUnit Value Effect on ŷ, per unit increase ŷ Alcohol consumption L per capita Intercept x1x Min Legal Drinking Age1 year - 4 L x2x Education Expenditures1% -1.3 L x3x GDP per capita$1, L x4x Unemployment Rate1% + 12 L x5x Global Peace Index1 Unit L x6x Inflation rate1% - 6 L x7x Homicide Rate per 100,000 people + 3 L ŷ = x x x x x x x 7

Check for Normality

Results Compared with Predictions  Positively correlated with alcohol consumption Unemployment Rate : TRUE Unemployment Rate : TRUE Inflation Rate : FALSE Inflation Rate : FALSE GDP per capita : TRUE GDP per capita : TRUE Homicide Rate : TRUE Homicide Rate : TRUE  Negatively correlated with alcohol consumption Minimum Legal Drinking Age : TRUE Minimum Legal Drinking Age : TRUE Global Peace Index: TRUE Global Peace Index: TRUE Government Education Expenditures : FALSE Government Education Expenditures : FALSE

Conclusion  Testing this hypothesis, where X 1 = min drinking age H 0 : B 1 = 0 H 1 : B 1 ≠ 0  Using a t-test at the 5% significance level, we rejected the alternative hypothesis.  Therefore, there is no significant relationship between the minimum legal drinking age and the consumption of alcohol per capita in a country.  This data supports the argument of the Amethyst Initiative.

Conclusion  Recalling our concern about the connection between alcohol and disease…  Governments cannot control any of the significant variables from our model Unless the government wants to go to war to curb alcohol consumption Unless the government wants to go to war to curb alcohol consumption

Acknowledgements  Professor Yoon for your guidance and statistics course.  Audience  Sources _ html _ html _ html _ html