Alcohol Consumption, Deterrence and Crime in New York City

This paper investigates the relationship between alcohol consumption, deterrence, and crime for New York City. We use monthly time-series data from 1983 to 2001 to analyze the impacts of variations in both alcohol consumption and deterrence on seven “index” crimes. We tackle the endogeneity of arrests and the police force by exploiting the temporal independence of crime and deterrence in these high-frequency data, and we address the endogeneity of alcohol by using instrumental variables where alcohol sales are instrumented with city and state alcohol taxes and minimum drinking age. We find that alcohol consumption is positively related to assault, rape, and larceny crimes but not murder, robbery, burglary, or motor vehicle theft. We find strong deterrence for all crimes except assault and rape. Generally, deterrence effects are stronger than alcohol effects.