Int. J. Environ. Res. Public Health 2010, 7, 1901-1912; doi:10.3390/ijerph7051901 OPEN ACCESS International Journal of Environmental Research and Public Health ISSN 1660-4601 www.mdpi.com/journal/ijerph Article Ning Zhang Alcohol Taxes and Birth Outcomes Department of Community and Preventive Medicine, The University of Rochester School of Medicine and Dentistry, 601 Elmwood Ave, Box 644, Rochester, NY 14642, USA; E-Mail: ning_zhang@urmc.rochester.edu; Tel.: +1-585-275-0165; Fax: +1-585-461-4532 Received: 1 March 2010; in revised form: 12 April 2010 / Accepted: 21 April 2010 / Published: 27 April 2010 Abstract: This study examines the relationships between alcohol taxation, drinking during pregnancy, and infant health. Merged data from the US Natality Detailed Files, as well as the Behavioral Risk Factor Surveillance System (1985–2002), data regarding state taxes on beer, wine, and liquor, a state- and year-fixed-effect reduced-form regression were used. Results indicate that a one-cent ($0.01) increase in beer taxes decreased the incidence of low-birth-weight by about 1–2 percentage points. The binge drinking participation tax elasticity is −2.5 for beer and wine taxes and −9 for liquor taxes. These results demonstrate the potential intergenerational impact of increasing alcohol taxes. Keywords: alcohol taxes; infant health; low birth weight; APGAR Score 1. Introduction Alcohol consumption during pregnancy can lead to adverse health effects for the developing fetus. Because alcohol passes through mothers’ bloodstream into the placenta, it can interfere with fetus’ ability to access oxygen and thereby with nourishment for normal cell development in the brain and other body organs [1]. Prenatal exposure to alcohol may increase the incidence of having an infant with poor health [2-8]. Indicators include: low-birth-weight, which refers to the birth weight lower than 2,500 g. Low APGAR scores are another indicator. The APGAR score is determined by evaluating the newborn baby on five criteria (Appearance, Pulse, Grimace, Activity, Respiration) on a scale from zero to two, then summing up the five values thus obtained. The resulting APGAR scores