DEAD ON ARRIVAL: ZERO TOLERANCE LAWS DON'T WORK

Why do college students drink so stupidly? Because drinking intelligently is against the law. --Jack Hitt, New York Times Magazine, October 1999 I. INTRODUCTION For two decades, U.S. drunk driving legislation has become increasingly strict as the states, responding to financial incentives provided by Congress, have reduced allowable blood alcohol content (BAC) levels. In 2005, the last state lowered its illegal per se BAC limit for adults to 0.08%, down from 0.10. During the 1990s, even lower limits of 0.01 or 0.02 were instituted for drivers under 21 yr (here, termed "youth"), as shown in Figure 1. This legislation, which adopts a "zero tolerance" policy toward underage drinking and driving, is the subject of this paper. Previous work on zero tolerance laws has thoroughly examined their effects on a variety of drinking-related behaviors, but as yet their effects on traffic fatalities--the most fundamental question of all--have not received a full treatment. Existing U.S. fatality analyses have been limited either in scope, comprising a small part of a larger empirical study, or sophistication, utilizing relatively crude statistical methods. A full treatment is needed for two reasons. The first is to thoroughly ground the analysis in economic theory, which has not been done before. On the surface, a zero tolerance law would seem to be a simple, powerful, sure way to reduce drunk driving fatalities. But economists, used to thinking on the margin, should suspect otherwise. This legislation generates strong marginal disincentives against taking the first drink, but much smaller marginal disincentives thereafter (depending on the effect of BAC on the probability of arrest, etc.). These marginal incentives are not uniformly stronger than those imposed by higher BAC limits. As a result, zero tolerance laws can have unintended, or perverse, effects of uncertain magnitude that counteract the purpose of the law. Ultimately, zero tolerance legislation has ambiguous effects on fatalities and economic efficiency. We demonstrate this in a simple model and derive new predictions that are testable and unambiguous. [FIGURE 1 OMITTED] Our second objective is to provide comprehensive evidence of zero tolerance laws' effects on traffic fatalities, applying a variety of panel techniques to data from the Fatality Analysis Reporting System (FARS) of the National Highway Traffic Safety Administration (NHTSA). The limited scope of earlier studies leaves their results, generally supportive of these laws' efficacy, potentially sensitive to specification or subject to omitted variables bias, problems that have occurred elsewhere in the traffic safety literature. In our analysis, we pay particular attention to these issues, which turn out to be fundamental, using a variety of direct and indirect methods to control for unobservable factors and ascertain the robustness of our results. This is complemented by a distributional analysis, new to this literature, that quantifies the intended and unintended consequences of zero tolerance legislation and tests the only robust hypotheses generated by theory. These analyses indicate that the intended and unintended consequences of zero tolerance legislation are minimal. Zero tolerance laws have no material effect on fatalities because they have no material effect on driver behavior. II. THE THEORY OF SINGLE BAG THRESHOLDS A. Setup A simple model can illustrate the individual and population effects of a reduction in permissible BAC levels, of which zero tolerance laws are the most extreme example. Let C denote the amount of alcohol consumed and [V.sub.n](C) denote the "value" of that consumption to the consumer: the amount individual n is willing to pay for permission to purchase C units of alcohol at the market price and consume them. Any harmful internal effects of alcohol consumption are captured in V; the expected harm to others resulting from drunk driving is denoted by D. …