Monthly update: October 2018

DIGITAL SINGLE MARKET CAMPAIGN

On 10 October, the CCC’s Luca Bertoletti and Bill Wirtz handed the Consumer Choice Center’s Digital Single Market research paper to the European Commission’s Head of E-Commerce.

TESTIMONY ON ONTARIO’S CANNABIS RULES

On 12 October, the CCC’s David Clement testified at the Ontario Standing Committee on Social Policy to provide comments on Bill 36, the province’s cannabis regulations.

CAPITOL HILL BRIEFING ON FDA REFORM

On 18 October, our Jeff Stier participated in a panel discussion dedicated to the FDA’s role in approving new consumer products that will improve countless lives. The event was co-hosted by Taxpayers Protection AllianceR Street Institute and the Consumer Choice Center.

PUBLIC CANNABIS CONSUMPTION BAN IN ONTARIO WAS REVERSED

On 26 September, Ontario reversed their decision to ban all public consumption for cannabis. Check out how the Consumer Choice Center contributed to the creation of a more equitable, just and consumer-friendly cannabis market in Ontario.

NICOTINE IS NOT YOUR ENEMY SOIRÉE

On 2 October, the CCC hosted the ‘Nicotine is Not Your Enemy Soirée’ in Genève (Switzerland) to celebrate the life-saving advancements in nicotine consumption technology.

BAN AWARD

The Framework Convention on Tobacco Control, a treaty of the World Health Organization (WHO), received the October 2018 BAN Award for preventing tobacco harm reduction and denying the science on life-saving e-cigarette and vaping technology.

EFFECTIVE STAND AGAINST THE FAIR FEES ACT

The FAA reauthorization is off to the White House, after the Senate voted 93-6 to clear the legislation without the FAIR Fees Amendments. Airlines can keep offering modularized services to different passengers with different preferences and price sensitivity. This is a win for consumer choice and competition in the airline industry.Check out how the Consumer Choice Center helped to keep the skies free by effectively opposing the FAIR Fees Act. #FreeSkiesAreFAIR

Is Moral Panic Justified? The Effect of Alcohol Privatization on Impaired Driving in Alberta

By Heather Bone, Research Fellow, Consumer Choice Center

Nearly every time the prospect of privatizing alcohol sales in Ontario is debated, there is a moral panic. If alcohol sales are privatized, the argument goes, alcohol will be more easily accessible, and there will be an increase in alcohol-related crime. In this research brief, I investigate the extent to which we should be concerned about an increase in social ills resulting from liquor store privatization by focusing on Alberta’s experience with impaired driving (due to limited data availability on other crimes like underage drinking). Thus, this paper answers the following question: Does the retail distribution system of alcohol affect impaired driving rates?

If you were to trust the Ontario Public Sector Employees Union (OPSEU), which represents the province’s 7,500 LCBO employees, you would assume that the relationship is positive – that is, that private liquor distribution systems bring about higher rates of impaired driving. A radio ad released by OPSEU argued: “In Alberta, you can buy alcohol at the grocery chains and in Alberta, it’s three-and-a-half times more likely that the person you pass coming out of the parking lot is driving drunk. Do you want to make that kind of a trade-off in Ontario? A little bit of convenience for a whole lot of pain and suffering.”[1] However, the data tells a different story.

Using data from Statistics Canada and the differences-in-differences econometric technique, I compared Alberta’s impaired driving rates in the four years after the privatization of their state-run liquor stores (in 1993) to their predicted rates in the absence of the policy change (using a computer-generated synthetic counterfactual composed of the impaired driving rates of Newfoundland and the Yukon – two jurisdictions which experienced no change in alcohol policy over the period studied). I found a statistically significant decline in impaired driving rates in response to the policy change. What OPSEU, in their analysis, conveniently omitted was that Alberta’s rates of impaired driving were much higher than Ontario’s prior to liquor store privatization.

My research suggests, if anything, that private retailers can be trusted more than government at keeping alcohol out of the hands of those who are most likely to abuse it. The key results are shown in Table 1 and visually depicted in Figure 1 below. The parameter of interest is the interaction between province and time (Alberta*After) which is negative and statistically significant, demonstrating that the policy change resulted in less impaired driving.

Table 1:

Impaired Vehicle Operation Offenses in Alberta per 100,000 people

Alberta -1.5

(37.2)

After -684.8***

(49.0)

Alberta*After -150.7*

(62.5)

Source: CANSIM Table 252-0013, Statistics Canada

***p <0.001, **p<0.01, *p<0.05

Figure 1: Impaired Vehicle Operation Offenses Per 100,000 People Over Time

Source: CANSIM Table 252-0013, Statistics Canada

The idea that Ontario, and other jurisdictions with state-owned liquor stores, need to choose between social ills and more consumer choice is a false dichotomy. While the costs of liberalizing alcohol sales are overstated, the benefits are clear. As a result of privatization, Alberta drastically expanded the range of products available to consumers from just 2,200 varieties of beer, wine, and spirits in 1993 to over 19,000 varieties today.[2] Ontario, and similar jurisdictions where the state is responsible for the sale of liquor, should, therefore, follow Alberta’s example and pursue privatization for the sake of consumer choice.

[1] OPSEU (2015), “OPSEU radio ads spark strong response from Alberta’s privatized alcohol sector”, https://opseu.org/news/opseu-radio-ads-spark-strong-response-albertas-privatized-alcohol-sector

[2] Milke, “Success of Alberta’s liquor store privatization a lesson for other provinces”, https://www.fraserinstitute.org/article/success-albertas-liquor-store-privatization-lesson-other-provinces

mm

About Heather Bone

Heather Bone is pursuing a doctorate in economics at the University of Toronto. Her research interests are broad, but generally relate to public policy. Right now, she is particularly focused on studying the economic functioning of cryptomarkets, including what they mean for consumer choice and how online drug markets are shaped by public policy decisions. For several years, Heather has been a dedicated advocate for consumer choice. She performed research to help advocate free trade while working in the Office of the Chief Economist in the Canadian Department of Global Affairs. She then went on to work as a legislative assistant in Ontario’s provincial government before working for the Manning Centre in Calgary, Alberta where she studied the economics of Business Improvement Areas. A list of Heather’s working papers and publications can be found on her website, heatherlynnbone.com.