Abstract
We examine how blood alcohol content (BAC) regulations have affected EU beer exports over the 1995–2019 period. We use BAC levels to group destination markets into five groups and examine how beer exports vary across BAC stringency. We distinguish between changes in the breadth of countries serviced (the extensive margin) and the trade deepening (the intensive margin). We find BAC rules which affect the two margins differently. The breadth of EU exports is lower for destination markets with the least stringent BAC rules than markets with more stringent rules (i.e., lower BAC cutoff). By contrast, we find that the depth of EU exports increases as the BAC rules become less stringent. We offer possible explanations for the divergent effects of BAC rules on trade patterns, but the results highlight the need for ongoing research on the topic.
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Notes
- 1.
A total of 26 countries in our data prohibit consumption of beer.
- 2.
Our data is reported by exporters, not importers. As our exporters are member of the EU, it is possible that they report exports to countries where consumption is prohibited. Presumably were we able to use import data reported by countries where alcohol is prohibited we would not observe any imports in trade. If that were indeed the case, we could conclude that beer in cans and bottles is imported in ways that avoid detection.
- 3.
- 4.
- 5.
- 6.
Armenia and Nigeria.
- 7.
Czechia, Democratic Republic of Congo, Georgia, Liberia, Myanmar, Romania, Samoa, and Turkmenistan.
- 8.
Botswana, Brazil, Colombia, Cuba, Equatorial Guinea, Ireland, Laos, Malta, Mongolia, Montenegro, New Zealand, and Uruguay.
- 9.
Countries with a non-missing BAC value change almost always involved very small changes in the BAC level (e.g., from 0.03 to 0.02) and such changes did not imply a difference in the BAC group assigned to the country.
- 10.
See Besedeš et al. (2017) for example.
- 11.
We will offer possible explanations for this surprising pattern in the final section of this chapter.
- 12.
In effect the specification summarizes country \(i\)’s exports across the destination markets within each of the five BAC groups.
- 13.
Full estimation results including time and country fixed effects are available upon request.
- 14.
It is bound below by zero and above by one, the highest extent of utilization of the extensive margin.
- 15.
Suppose Germany exports all three packaging types to, say, Chile. For example, €100 in cans, €200 in bottles, and €300 in kegs. The specification in Table 2 would reflect that Germany exports €600 of beer to Chile.
- 16.
The FLEX estimator is again used for the utilized extensive margin and OLS is used for the intensive margin.
- 17.
The full estimates are available upon request. All key parameters are statistically significant at the 1% level.
- 18.
Negative values for bottles and kegs to prohibited markets indicate that it is even rarer to service those markets in those types of containers compared to cans of beer.
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Besedeš, T., Prusa, T.J. (2023). Blood Alcohol Regulations and EU Beer Exports. In: Patterson, M.W., Hoalst-Pullen, N. (eds) The Geography of Beer. Springer, Cham. https://doi.org/10.1007/978-3-031-39008-1_5
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