Vice Squad
Friday, April 02, 2004
Last Call to Be Postponed in Arizona?

Alcohol cannot legally be served in bars or restaurants in Arizona after 1AM. The state senate, however, has "tentatively approved" a bill that would institute a 2AM liquor shutoff.

I suppose many libertarians would have a problem with time-of-day restrictions on alcohol sales (or on sales of anything else, for that matter), but like John Stuart Mill, I have no argument against them on principle. Indeed, I probably even support such laws. But one of the arguments put forth in support of Arizona's proposed opening hour extension I have little truck with: "Liquor lobbyists, tourism advocates and lawmakers pushing the plan estimate the move would add $55 million to the economy and generate more than $3 million in sales taxes."

The additional sales tax revenues, in the first instance, are not a net gain to society at all, but a transfer from consumers of alcohol to those who benefit from the projects on which the government spends its resources. But even here, you have to ask what the individuals would otherwise (in the absence of their additional liquor purchases) have done with their money, and the tax revenues that would have been raised by those alternative uses. And basically I have no idea what "adding $55 million to the economy" would mean -- again, especially if you think of what would have happened with those "additional liquor" dollars without the hours extension.

The main potential social benefit of the hours extension goes unnoted in the article, as it typically goes unnoted in public discussions of vice. That benefit is the increased enjoyment (consumer surplus, in the econ lingo) that many people will get from being able to stay in public drinking establishments one hour later. There is reluctance with noting this as a benefit, in part because we are rightly a little more skeptical of using willingness-to-pay (the standard econ measure of benefit) as a metric of gain in the vice arena -- is a heroin addict really better off when he chooses to use heroin? The skepticism extends even to the decisions of non-addicts, as lots of people regret vice-related decisions in ways that they don't ever regret their decisions to consume,say, ketchup. Nonetheless, for many if not most people who take advantage of the extended hours, they will rationally view their new opportunity to drink later as a benefit, and it is this increased satisfaction -- not tax revenues or "adding dollars to the economy" -- that is the main potential gain from the proposed reform.


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