In the lead up to Washington State voters approving privatization of liquor sales in the state, opponents claimed—as they always do—that the increased availability and lower prices would undoubtedly result in increased rates of crime, alcohol-related auto accidents, and greater numbers of minors having access to alcohol. The number of outlets in the state has soared (consumers can now buy liquor at more than 1,600 retailers compared to 329 state-run and rural contract stores before) and while there were some reports that liquor thefts might have increased, according to the Washington State Patrol, most alcohol-related arrests have declined since privatization went into effect on June 1, 2012.
WSP data shows there were 2,861 DUI collisions and 21,941 DUI arrests during the 2008-09 time period. Under the first year of privatization those numbers were down to 2,347 DUI collisions and 19,703 DUI arrests. Statistics for “minor in possession” showed an even bigger improvement with 1,483 cases between 2008-09 dropping to 777 during 2012-13.
Similarly, the rate of minors caught with alcohol has declined. While opponents of privatization claimed that state liquor store employees were better equipped to prevent such activity, it seems that private retail workers have been doing fine, better than fine, actually.
According to a new report from the Washington Policy Center:
Judging from the first year of data, the private sector has stepped up to this challenge. According to the WSLCB’s “Compliance Rates for Retailers Since 2012,” those private sector stores with at least 10,000 square feet (as required by Initiative 1183) or former state contract stores have averaged just over a 92 percent compliance rate. The most recent check for August 2013 showed a compliance rate of nearly 94 percent These numbers do not show a significant drop in compliance rates with private liquor sales.
What could explain the drop in alcohol-related criminal activity? While many public health advocates believe that increasing alcohol outlet density (the number of places one can buy alcohol in a square mile) will automatically increase the rate of alcohol-related injuries and crime, some researchers have found that this isn’t so.
In his 2003 study, economist Patrick McCarthy examined 111 California cities and found that a higher number of take-away alcohol stores actually correlated with decreases in fatal and nonfatal alcohol-related car accidents. And in her 2010 study, Tenaya Marie Sunbury, a Ph.D. candidate at the University of Michigan, found that higher alcohol retail density actually correlated with lower alcohol consumption, lower rates of binge drinking, and fewer rates of drunken driving. Her hypothesis, which seems likely, is that more stores nearby mean that people have to travel shorter distances to buy their alcohol and may not have to drive at all—decreasing the likelihood of these consumers driving while intoxicated. In the case of Washington, now that consumers can purchase their liquor while they do their food shopping, the likelihood that they will be sober when they do their alcohol purchasing is greater.
After privatization, the variety and availability of alcohol increased across the state, and while prices also increased (a result of the increased taxes the privatization bill put on alcohol sellers) those prices do appear to be dropping back down to pre-privatization levels.
The moral of the story is that the consequences of any regulatory change are quite difficult to predict. Attempting to engineer consumer behavior through policy is at best unlikely to work and at worst likely to have negative effects that nobody saw coming. The soundest course of action is to leave people free to make their own choices about how they live their lives.