Research supports Stigler

None of us likes that our parties' tab at Trinity can go well into the three figures. It's annoying that you can't purchase alcohol after midnight or on Sundays. Stigler writes that "every industry or occupation that has enough political power to utilize the state will seek to control entry" and that regulation is intended to protect at least a large portion of the population. While the liquor industry stays thriving when a single shot costs $10, we, whether we like it or not, benefit from this regulation.

My stomach fell when my brother (who is at Clemson) told me that someone brought moonshine to his frat's party; I thought of all the awful side effects of this unregulated product. This article that I read on a pro-alcohol policy site, lists the reduction in negative consumption externalities if alcohol costs 10% more. You can read the full list on the website but the negative externalities reduced by raising alcohol prices range from a 3.6% drop in sexual assaults/rapes to an increase in the ease of creation of new businesses. In my research at UVA hospital, I see the damage alcohol has done every time I collect data. As much as I think that the government shouldn't make every moral decision, I also kinda wish that these participants and other alcoholics had been "priced out" of the alcohol market.

The only problem that I have with Stigler's work is that he doesn't address the fact that higher prices can lead to secondary markets. When Stigler goes down to South Carolina and regulates the moonshine market at Clemson, I'll be happy.